Connections and Impact

GROWING OUR Connections and Impact

2019 Millicom Annual Report Our Purpose: To build the digital highways that connect people, improve lives and develop our communities.

Growing Our Connections and Impact Millicom drives its business success through connections that matter. Connections that open doors to knowledge, enable people to thrive in the digital economy and help businesses realize financial opportunities that would otherwise go untapped. We continually pursue new ways to extend the reach and impact of our digital highways through innovations that fuel productive, sustainable growth in the markets where we operate.

As we create vital connectivity through our fixed and mobile networks, we also lead responsibly to foster an environment where our employees, customers and communities can prosper and reach their full potential. We strive to lead by example, particularly in ethical business practices and responsiveness to the needs of all people in our communities.

We are headquartered in Luxembourg, with a U.S. corporate office in Miami. Through our Tigo and Tigo BusinessTM brands, we provide a wide range of digital services, including high-speed data, cable TV, voice and SMS, Mobile Financial Services, and business solutions. We serve customers in nine Latin American markets— Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Paraguay—as well as in Tanzania.

Millicom 2019 Annual Report Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

About This Report Our fourth integrated annual report combines our corporate responsibility (CR) and financial reports to provide all our stakeholders with a clear and comprehensive overview of SPOTLIGHTS IN our business and activities in 2019. The report conveys our progress against our business strategy and identifies and quantifies the ways in which our practices and programs THIS REPORT under our CR Framework deliver business value, transform communities, and protect our We seek to make a environment as contemplated under the UN Sustainable Development Goals. positive difference in the Our CR Framework and Five-Year CR plan, against which we are reporting this year, were built on our 2018 Materiality Assessment and ongoing dialogue with internal and lives of individuals, the external stakeholders. We will continue to seek feedback from investors, customers, success of businesses, employees and community leaders to inform about our corporate responsibility efforts. and the progress of [Click here] to find out more about our CR reporting approach. communities through our Note: Our Latin America (Latam) segment includes our Honduras and Guatemala joint actions as a company. ventures as if they were fully consolidated, as this reflects the way our management The impact of our work reviews and uses internally reported information to make decisions about operating matters. We also report in this way to provide increased transparency to investors on throughout 2019 can be those operations. Unless otherwise noted, the data in this report includes the opera- seen in various feature tions of Cable Onda and Telefónica Central America assets in Panama and Nicaragua stories bearing a that Millicom acquired in 2018 and 2019, respectively. Spotlight icon that appears throughout the pages that follow. They What’s Inside This Report demonstrate how our Overview Governance 22,000-plus employees 02 Chairman’s Message 67 Chairman’s report help put Millicom’s 03 Chief Executive Officer’s message 68 Corporate governance framework strategy, purpose and 05 Our Year in Numbers 69 Shareholders and shareholders’ 06 Our Market Leadership meeting responsible leadership 71 Board of Directors and Managing Our Business into action. Board committees 09 Our Market Outlook 74 Board profile–skills and experience 10 Our Financial Performance 77 Board program 15 Supporting Our People 80 Board committees 22 Our Business Strategy and 80 I. Audit Committee Performance 83 II. Compliance and Business 28 Enterprise Risk Management Conduct Committee 33 Compliance and Business Ethics 85 III. Compensation Committee: Fulfilling Our Corporate Responsibility Remuneration Report 36 Our CR Framework 92 Millicom CEO and Executive Team 38 CR Fundamentals 99 Directors’ Financial and 39 Environment Operating Report 41 Human Rights 100 Management responsibility 42 Ethics statement 43 Inclusion Disclaimers 43 Supply Chain 102 Forward looking statements 44 Our Responsible Leadership in Action 103 Non IFRS definitions 45 Protecting Children 104 Non IFRS reconciliations 47 Empowering Women 49 Connecting Communities Auditors’ Reports and Financial Statement 50 CR Performance Tables 116 Independent Auditor’s Report 64 Assurance Letter 120 Consolidated Financial Statements 127 Notes to the Consolidated Financial Statements

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Chairman’s Message At the end of 2019, I completed my first year as Chair of Millicom’s Board. I am more impressed than ever with how our digital highways help communities overcome obstacles to access the digital world and enable technological breakthroughs. We are making connections that matter and doing it in the right way.

In 2019, Millicom continued straight and true on a path of delivering on our value proposition and business strategy. Steadfast execution against our strategic pillars resulted in the company delivering key operational targets and achieving a solid financial performance, despite periods of weaker economic activity and political uncertainty in parts of Latin America. Our unprecedented investments to extend the reach of Millicom’s cable and 4G network across nine countries further strengthened our position as the leading telecommunications provider in these markets. Along with integrating the businesses in Central America from acquired operations from Telefonica and Cable Onda in Panama, we also finalized the sale of Tigo operations in Chad as part of our strategic focus on Latam. As always, our Governance structure and Business Ethics and Compliance programs were key to navigating some of the risks inherent to operating in emerging markets. Doing business in the right way is a fundamental driver embodied in our new “Sangre Tigo” framework that sets the tone from the top and cascading down through the whole organization. We believe our commitment to ethics and compliance builds strength and success for our company, and positions Tigo as a force for positive change in the countries and communities we serve. The listing of Millicom’s common shares in the U.S. in NASDAQ Stock Market in January 2019 has opened greater opportunities to reach potential investors and provided additional support for our growth strategy. We paid special attention this year to enhancing controls and policies in our first year of compliance with the Sarbanes-Oxley Act. This was also a transformational year of progress in our efforts to bring lasting social, environmental and economic value to the people and communities we serve. I am proud of how we are building our market leadership on a sound strategy that intertwines Millicom’s Corporate Responsibility framework with our business objectives. For us, doing good business and doing what’s right are two sides of the same coin. Ultimately, it’s our people who bring our ambitious vision to life. We recognize the importance of ensuring that Millicom is a place where employees feel safe, protected and supported in ways that enable them to do well, and enhance their lives and the lives of those around them. I am pleased that we took steps in 2019 to create a more robust Diversity and Inclusion strategy. 2019 ended with another important milestone in our history as the company’s largest long term shareholder, Kinnevik AB, exited as a shareholder through a distribution of its entire 37% stake in Millicom. On behalf of the Board, I want to extend our gratitude for the valuable role Kinnevik has played in our company’s story. Now begins an exciting new chapter for Millicom as a business 100% owned by public shareholders who can trade TIGO on both the U.S. and Stockholm NASDAQ exchanges. In my first year as Chairman, I deeply appreciated the ways that our newest Board members—Pernille Erenbjerg, Mercedes Johnson and Jim Thompson—stepped into their responsibilities with poise and enthusiasm. We are for- tunate to gain their deep business experience and regional knowledge. I also want to recognize the contributions made by Tom Boardman, Anders Jensen and Roger Sole Rafols, who ended their Board service in 2019. Lastly, I thank the Executive Team for executing our business strategy so capably. Their commitment made a tremendous impact on our performance in 2019 and positioned us for even greater success in 2020 and beyond. It is my pleasure to share our Annual Report with you. I hope you find this summary of our business and Corporate Responsibility achievements to be as exciting and inspiring as I have.

José Antonio Ríos García Chairman of the Board of Directors

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Chief Executive Officer’s Message 2019 was a pivotal year for our company, with several game-changing milestones. Our collaborative approach to executing our business and corporate responsibility strategies provided results that truly benefited our shareholders, our customers, our employees and the communities of the countries we serve.

We reinforced our commitment to Central America with an unparal- leled inorganic investment of more than $3 billion over the last 18 months, adding Cable Onda in Panama and Telefónica’s operations in Nicaragua, Panama and Costa Rica1 to our existing operations. These transactions enhanced our footprint and advanced our goal to rede- “We have an obligation to ploy capital from under-performing to higher-performing regions. As a result, we significantly enhanced Tigo’s mobile and fixed conver- ensure the technology we gence capabilities in 2019. Tigo is now the No. 1 or No. 2 provider of provide is being used mobile, broadband internet and pay TV services in eight out of our nine Latam markets. responsibly and has the best Our business strategy—in place since 2016—is working, and the possible outcome for the results can be seen in our revenue growth over the past year. Revenue for 2019 increased 9.9% to $4,336 million, and net profit for the year communities we serve.” attributable to shareholders improved to $149 million, or $1.48 per share. We are confident that by executing our strategy, we will continue to create long-term value for shareholders. “ Our customers benefited from our investments last year as well. We added a record number of customers to our 4G network, giving them faster, more reliable mobile internet access. We capitalized on our enhanced infrastructure capabilities to expand our business-to-business services, gaining 4,000 new customers in the past year. In 2019, we also advanced our goal to become a “content supermarket” for our Latam customers, creating strategic partnerships with Google, Amazon and others to deliver the richest selection of consumer experiences and business solutions. These enhanced offerings and our commitment to “give 1,000% to our customers” resulted in a tangible uptick in the Net Promoter Score metrics we use to measure customer satisfaction. Ultimately, our success as a company ties back to our purpose and the transformational benefits that individuals and communities gain from being connected and participating in the digital lifestyle. Last year, we catapulted our long-standing corporate responsibility efforts to a new level as we put into action our updated and more cohesive Corporate Responsibility Framework, including measurable targets. The refined framework includes five Corporate Responsibility Fundamentals that guide us in how we manage our business, as well as our Responsible Leadership in Action initiatives to empower women, protect children, and connect communities. (More details can be found on pages 34-63 of this year’s report.) This also highlights our ongoing commitment to the United Nations Global Compact.

1 Reflects our pending acquisition of Telefonica Costa Rica.

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Highlights of our CR progress in 2019 clearly demonstrate how we create shared value for our multiple stakeholders: » Promoting safe and productive Internet use among youth. Through our Conectate Segur@ program, we provided thousands of children, parents, teachers and caregivers with practical lessons on how to avoid potential dangers online so they can more fully enjoy the benefits of technology. » Narrowing the digital gender divide. Through our Conectadas program, we moved closer to our goal of training 400,000 women on digital tools and entrepreneurial skills by 2023, empowering them to support their families and contribute to their communities’ economic vitality. » Issuing our first Sustainability Bond. Valued at approximately $211 million, our inaugural Sustainability Bond is helping us reduce our climate footprint and promote greater digital and financial inclusion in emerging markets. The enthusiastic response from investors for this bond underscores how our company can be a powerful vehicle for channeling funds from capital markets in Sweden, the United States, and elsewhere to developing countries in Latin America. » Sharing the talent of our people. We created opportunities for hundreds of Tigo employees to volunteer in our Conectate Segur@ and Conectadas digital inclusion programs, allowing our employees CEO Mauricio Ramos during the to engage directly with communities to create positive changes in public announcement of Millicom’s acquisition of their lives through technology, which in turn, create positive rewards Telefonica in Panama for our employees. In our business operations and CR programs alike, our talented and committed employees are the lifeblood that propels us forward with great momentum. We call this powerful force our “Sangre Tigo.” In 2019, we dedicated ourselves to defining the essence of Sangre Tigo—those attitudes, behaviors and beliefs that our people bring to work—to ensure our company remains a great place to work as we grow. Our more than 22,000 employees now have a clearer sense of our purpose and are channeling their energy to have a positive impact for all our stakeholders. I want to thank our Board, our community partners and our employees for their invaluable role in fulfilling our purpose in 2019. As you’ll see on the pages that follow, our attention to growing our connections and impact, and the results that accrued to all our strategic stakeholders last year give us many reasons to feel optimistic about 2020. We know there are challenges ahead, and we look forward to tackling them with enthusiasm, with Sangre Tigo.

Mauricio Ramos Chief Executive Officer

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Financial and Operational Highlights

FINANCIAL RESULTS HOME Revenue HFC Homes Passed ($m) (m)

2017 $3,936 2017 8.4 + % +8.5% 2018 9.9 2018 $3,946 Year-on-year 10.6 Year-on-year growth growth 2019 $4,336 2019 11.5

Gross Profit HFC Customer Relationships ($m) (m)

2017 $2,767 2017 2.3 + % +11.3% 2018 10.8 2018 $2,829 Year-on-year 3.1 Year-on-year growth growth 2019 $3,135 2019 3.5

MOBILE 4G customers (m) 22K+ 2017 7.2 + % 2018 47 10.5 Year-on-year growth Full-time employees and 2019 15.4 approximately 30,000 contractors

Indicator reflects Latam segment. 11.6K • Points of presence • 4G Customers • HFC Homes Passed • HFC Customer Relationships Points of presence

Corporate Responsibility Highlights

200 89% 1,400+ 207K

Key Staff trained on Strategic suppliers who Connected Women who Human Rights signed the Supplier schools participated in our Code of Conduct digital inclusion and training programs

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Honduras Mobile #1 BBI #1 Pay TV #2

Guatemala Nicaragua Mobile #1 Mobile #1 1 BBI #2 BBI #2 El Salvador Panama Pay TV #1 Mobile #2 Pay TV #2 Mobile #1 BBI #2 BBI #1 Pay TV #2 Pay TV #1 Costa Rica1 Mobile #2 BBI #3 Pay TV #1

Colombia Mobile #3 BBI #2 Pay TV #2 Consolidating our leadership position in Latam through diligent execution of our business strategy.

Strengthening our leadership position in Latam through diligent Bolivia Mobile #2 execution of our business strategy BBI #1 Pay TV #1 Our long-term focus on converging Tigo’s fixed and mobile services throughout Latin America continues to drive solid business result. Millicom’s gains in recent years from both organically increasing our market share and investing in key acquisitions to further consolidate our regional footprint. Paraguay Mobile #1 As a result of our acquisitions of Cable Onda, the leading cable operator in Panama, BBI #1 Pay TV #1 and of Telefonica’s telecom operations in Panama, Costa Rica and Nicaragua, Tigo is reshaping the industry landscape in Central America. These new assets allowed us to add Panama to our portfolio of countries served and accelerated our fixed-mobile convergence strategy in the region. Most importantly, we can provide customers in these markets with the high quality fixed and mobile services they expect. Our significant investments demonstrate Tigo’s commitment to expanding digital highways and advancing economic prosperity in Latam for years to come.

1 Reflects our pending acquisition of Telefonica Costa Rica, and America Movil’s pending acquisition in El Salvador.

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A Single Integrated Company By executing on our business strategy, Tigo is now the only convergent operator in each of its 9 Latin American markets.1

OUR BUSINESS STRATEGY Monetizing Mobile Data A sound mobile data monetization strategy will continue to translate incremental growth into additional revenue through: » Expansion of our 4G/LTE network » Transition to a postpaid subscription revenue model » Products and services that stimulate data usage Building Cable Demand for high-speed data from both the business sector and individual customers drives revenue growth. To meet this demand, we are: » Accelerating the expansion of our hybrid fiber-coaxial (HFC) network » Targeting acquisitions that complement our organic buildout » Adding content and services to drive further growth in Average Revenue Per User (ARPU). Accelerating Convergence The deployment of IT solutions to efficiently market and support convergent solutions will help us: » Differentiate ourselves in the marketplace » Generate new revenue streams » Increase customer satisfaction and loyalty » Reduce customer churn and costs » Prepare for future network deployments such as 5G. Driving B2B Growth To accelerate growth among multinational corporations, large local companies and small and medium size businesses (SMBs), we have made B2B fundamental to our strategy by: » Differentiating the Tigo Business brand through excellent service and frontline execution » Selectively evolving our portfolio into Information and Communications Technology (ICT)-managed services. » Investing in state-of-the-art infrastructure, including tier 3 datacenters » Developing and supporting sales and marketing capabilities to penetrate and serve new customers. Promoting a Digital Experience Increased digitization of our processes and operations continue to benefit our company and customers as we: » Provide superior digital journeys for our customers that will ensure we become or Tigo Sports Tigo Music remainTigo Money the operator of choice; » Create new tools and an enhanced operational model so our teams can do their work more efficiently; and » Offer next generation user-experience platforms that seamlessly integrate content across linear and on-demand channels. Tigo ONE tv Mi Tigo Tigo Shop Tigo Sports Tigo Music Tigo Money

Tigo Business Tigo Sports Tigo Music Tigo Money Tigo ONE tv Mi Tigo Tigo Shop

1 Reflects our pending acquisition of Telefonica Costa Rica.

Millicom 2019 Annual Report Tigo ONE tv Mi Tigo Tigo Shop Tigo Business 7

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Managing Our Business

Millicom’s performance reflects the interconnected work of teams across many disciplines. We stay on track to excel by diligently studying and monitoring our markets, continually supporting and developing our human capital and honing and measuring our progress against our business strategy. Our continued success also hinges on how we mitigate risks and optimize opportunities in our organization, meet our rigorous ethical and compliance standards, and govern our company. This section of our Annual Report lays out how all those components contribute to our success.

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Our Market Outlook We take a long-term view and follow a rigorous and disciplined approach to capital allocation as we expand the company’s digital infrastructure throughout Latin America. The assets that we have built over the past several years, together with our recent cable and mobile acquisitions in Central America, have enabled us to provide new services and to add customers and increase usage of our network in markets where a growing middle class is devoting a larger share of its disposal income to communication and information services. Our strategy to further consolidate Tigo operations in Latam holds some degree of planned risk, but we see significant potential growth ahead for this region. In its Latin America Economic Outlook forecast from October 2019, Oxford Economics predicted several encouraging trends in many of the countries we serve. Among them: » Steady GDP growth for much of the region » Reduced volatility in exchange rates for Latam as a whole, with a few exceptions » 6.6% annual growth in the number of households with an average income of more than $20,000 over the next decade—from about 8 million in 2018 to roughly 15 million by 2028 We are positioning Tigo to both profit from and contribute to the region’s upward momentum. As our customer base and portfolio offerings grow, we bring more capital and a deeper well of expertise to emerging markets. In turn, the people and businesses that use our digital highways to improve their economic stature bring follow-on benefits—such as added disposable income, new jobs and greater civic involvement—to their communities. In these and many other respects, our strong competitive position in Latam not only benefits Millicom shareholders but also our customers, employees and communities. Managing our business is truly inseparable from advancing economic development and social progress in the countries where we operate.

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Chief Financial Officer’s Message We continued to focus on capturing the broadband opportunity in our Latin America markets during 2019, as we saw positive results in both mobile and cable during the year. Additionally, we completed our footprint in Central America, acquiring and integrating mobile operations in Nicaragua and Panama. We continued to execute on our capital allocation strategy, selling Chad and supporting Jumia and Helios Towers with their successful stock exchange listings.

Group highlights1 Revenue for the year ended December 31, 2019 increased 9.9% to $4,336 million, as revenue from acquisitions more than offset the impact of weaker foreign currencies. Operating income for the year declined 10.1% to $575 million, as we recognized other operating losses primarily due to a non-cash loss on disposal of equity investments and fair value adjustments. Operating expenses decreased 0.8%, while depreciation and amortization increased 37.2% resulting from newly acquired operations, and the impact of IFRS 16 adoption. The share of net profit in our joint ventures in Guatemala and Honduras increased 16.0%, due to positive results in these operations during 2019. Net interest expense increased 57.1% to $544 million, mainly due to an increase in our gross debt during the year resulting from acquisitions, and the impact of IFRS 16. In order to finance our acquisitions in Central America, we were active in the debt capital markets in 2019, issuing our first bond in Panama and our first Sustainability Bond in Stockholm. Following the acquisitions of mobile assets in Central America, our leverage ended 2019 at 3.19x on a proforma proportionate net debt-to-EBITDA basis. Our leverage ratio is currently above our long-term target of 2.0x, primarily due to the acquisitions, but we expect that future EBITDA growth and cash generation will allow us to return to our target leverage ratio in the medium term.2 Income from other non-operating items increased by $266 million to $227 million during the year, due to an increase in value in our equity investment in Helios Towers, offset by a decrease in value in our equity investment in Jumia as well as foreign exchange losses during the year. Tax expense increased 7.2% to $120 million, due to the net movement between lower profitability in Latin America resulting in a lower income tax charge, offset by the inclusion of acquisitions and a higher net deferred tax expense during the year. As a result of the above factors, net profit for the year atributable to shareholders was $149 million, or $1.48 per share. For more extensive details on Millicom’s financial performance, please refer to pages 118-213.

Tim Pennington Chief Financial Officer

1 Group highlights are presented on an IFRS basis and therefore do not consolidate the results from our Guatemala and Honduras joint ventures. 2 This paragraph includes Non-IFRS measures. Please refer to the non-IFRS disclosures in this annual report for a description and for a reconciliation of non-IFRS measures.

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This section provides a summary of the financial and operating performance of our Latin America and Africa segments through selected performance indicators1 that are based on our management reporting, presenting Guatemala and Honduras joint ventures as if fully consolidated in the Latin America segment. Our 2019 Financial Performance in Latin America 2019 was a challenging macroeconomic year for some of our markets. Paraguay, for example, experienced negative GDP growth during the first half of the year due to volatility in neighboring economies and to fluctuations in commodity prices which impacted the agricultural sector. Meanwhile, Bolivia and Nicaragua were impacted by periods of widespread political protests and social unrest, which dampened economic activity. In Panama, economic growth slowed during the first half of the year. The slower macroeconomic growth environment, combined with increased competition in some markets, meant that our Latin American organic service revenue growth was 2.2% in 2019 representing a slowdown compared to 4.3% growth in 2018. EBITDA growth was 2.1% (2018: 3.5%) on an organic basis during the year. However, OCF (this is EBITDA minus Capex) growth was robust and rose 8.3% (2018: 3.2%), demonstrating our capability to deliver strong cash flow growth even under challenging market conditions. In our Mobile business, which accounts for 59% of Latam service revenue (2018: 63%), we increased our footprint by adding operations in Nicaragua and Panama, which added 5.2 million mobile users to our network. Aided by these acquisitions, our customer base increased to 39.8 million customers and our 4G customers increased to 15.4 million, and we continued to improve our penetration rates, with 4G reaching 39% of our mobile customers at the end of 2019, an improvement from the 31% penetration rate at the end of 2018. Mobile service revenue increased 1.4% year-over-year from 2019 (2018: -2.1%) as revenue from acquisitions more than offset the impact of weaker currencies and a slight decline in our organic growth during the period. In our Cable and other fixed business, which generates about 40% of our Latin American service revenue (2018: 36%), we expanded our HFC network during 2019 to cover an additional 901,000 homes, bringing the total to 11.5 million at year-end 2019 (2018: 10.6 million). We added 351,000 net HFC customer relationships, ending the year with 3.5 million, a penetration rate of 30% (2018: 29%). Revenue in our Cable business increased 21.5% year-on-year (2018: 3.1%) fueled by the acquisition of Cable Onda, as well as robust organic growth in most markets, which more than offset the drag from weaker currencies. By country, organic service revenue growth was positive in seven of our nine markets, while EBITDA grew in Bolivia, Colombia, Panama, Guatemala and Honduras. Our Colombia business showed improvement in both the mobile and home businesses; Guatemala and Honduras performed strongly, as our market-leading mobile businesses continued to drive success in these countries. Results in Bolivia and Paraguay were afected by competition as well as by the macroeconomic and political situations, respectively. Despite social unrest, our Bolivia home business was one of our strongest performers during the year. A slowing economy also afected our Panama operations, but our focus on synergies during the integration resulted in strong EBITDA, and cash flow growth during the year. Capex in Latin America was $1 billion in 2019, as we continued to invest to support the ongoing expansion of both our mobile and fixed networks in the region. By year-end, our 4G networks covered approximately 69% of the population of our markets, which now include Nicaragua and Panama. Strong 4G mobile network coverage and performance allowed us to allocate a majority of our capex toward our cable network expansion in 2019, consistent with recent years. Customer premise equipment deployed to support the growth of our Cable customer base accounted for more than 30% of our total capex in the region, indicating that a significant portion of our capex is success-driven and variable in nature, which helps to reduce volatility in cash flow generation.

Latam ($m) 1% 10% 13% Other Paraguay Other $60m Service revenue 6% Organic growth +2.2% El Salvador 37% Cable and $5,514 26% Revenue by other ﬁxed Revenue by Colombia country $2,197m 2 business EBITDA 24% 55% Organic growth +2.1% Guatemala Mobile 7% $3,258m $2,443 10% Equipment Honduras 11% Sales Revenue Bolivia $449m

1 Non-IFRS measure. Please refer to the non-IFRS disclosures in this annual report for a description and for a reconciliation of non-IFRS measures. 2 Our Latin America (Latam) segment includes our Guatemala and Honduras joint ventures as if they were fully consolidated. Service revenue, EBITDA, OCF, CAPEX and organic growth are non-IFRS measures. Please refer to page 103 for description of non-IFRS measures

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Service revenue* $m Colombia Others CABLE AND OTHER MOBILE (’000) FIXED (’000) Organic growth +2.8% $42m Mobile 4G smartphone $577m Home customer data users 2019 $1,432 relationships1 3,570 2018 $1,553 1,710 As of year end 2019 As of year end 2019 EBITDA $m Organic growth +3.0% Service 870 36 Net additions 2019 $510 Cable and Revenue Net additions other ﬁxed 2018 $494 $813m +32.2% +2.1% YOY Growth YOY Growth EBITDA margin** % *Organic growth represents year-on year-growth excluding 2019* 33.3% the impact of changes in FX rates, perimeter, and accounting. 2018 **Excluding the benefit of IFRS 16, 2019 EBITDA 29.7% margin would have been 29.8%.

CABLE AND OTHER MOBILE (’000) Service revenue* $m Bolivia Others Organic growth +4.5% $2m FIXED (’000) 4G smartphone Home customer data users 2019 $624 Cable and relationships1 other ﬁxed 2,171 2018 $597 $205.1m 511 As of year end 2019 As of year end 2019 EBITDA $m Organic growth +6.3% Service 359 122 Net additions 2019 $257 Revenue Net additions +19.8% 2018 $232 +31.3% YOY Growth YOY Growth EBITDA margin**% *Organic growth represents year-on year-growth excluding 2019 40.2% Mobile the impact of changes in FX rates, perimeter, and accounting. $416.4m 2018 **Excluding the benefit of IFRS 16, 2019 EBITDA 37.8% margin would have been 38.5%.

$m Paraguay Others CABLE AND OTHER MOBILE (’000) Service revenue* $1.3m FIXED (’000) 4G smartphone Organic growth –1.2% Home customer 2019 $575 1 data users Cable and relationships 2018 $632 other ﬁxed 437 1,520 $210m As of year end 2019 As of year end 2019 EBITDA $m Organic growth –5.6% Service 30 436 Net additions 2019 Revenue Net additions $294 +7.5% +40.2% 2018 $332 YOY Growth YOY Growth EBITDA margin**% *Organic growth represents year-on year-growth excluding Mobile 2019 48.2% the impact of changes in FX rates, perimeter, and accounting. $363m 2018 **Excluding the benefit of IFRS 16, 2019 EBITDA 48.8% margin would have been 47.2%.

$m Guatemala Others CABLE AND OTHER MOBILE (’000) Service revenue* $3m FIXED (’000) 4G smartphone Organic growth +5.3% Cable and Home customer data users 2019 $1,234 other ﬁxed relationships1 $201.4m 3,894 2018 $1,200 519 As of year end 2019 As of year end 2019 EBITDA $m Organic growth +4.7% Service 906 34 Net additions 2019 $748 Revenue Net additions +30.3% 2018 $689 +7.1% YOY Growth YOY Growth EBITDA margin** % *Organic growth represents year-on year-growth excluding 2019 52.2% the impact of changes in FX rates, perimeter, and accounting. Mobile 2018 **Excluding the beneﬁt of IFRS 16, 2019 EBITDA 50.2% $1,029.7m margin would have been 49.1%.

1 Includes HFC, DTH, Copper and other technologies.

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CABLE AND OTHER MOBILE (’000) Service revenue* $m Honduras Others FIXED (’000) Organic growth +1.7% Cable and $6m 4G smartphone other ﬁxed Home customer data users 2019 $551 relationships1 $92m 1,747 2018 $555 176 As of year end 2019 As of year end 2019 EBITDA $m Organic growth +0.5% Service 469 11 Net additions 2019 $280 Revenue Net additions +36.7% 2018 $268 +6.9% YOY Growth YOY Growth EBITDA margin** % *Organic growth represents year-on year-growth excluding 2019 47.1% the impact of changes in FX rates, perimeter, and accounting. Mobile 2018 45.8% $452.4m **Excluding the benefit of IFRS 16, 2019 EBITDA margin would have been 44.4%.

Panama CABLE AND OTHER MOBILE (’000) Service revenue* $m Others FIXED (’000) Organic growth +0.4% $5m Mobile 4G smartphone $70.4m Home customer data users 2019 $468 relationships1 787 2018 $17 437 As of year end 2019 As of year end 2019 EBITDA $m –23,378 68 Organic growth +9.1% Service 23 Net additions Net additions 2019 $223 Revenue Net additions –5% 2018 $4 N/A YOY Growth -5.1% YOY Growth YOY Growth* EBITDA margin**% *Organic growth represents year-on year-growth excluding *Net adds since acquisitions Cable and 2019 46.9% other ﬁxed the impact of changes in FX rates, perimeter, and accounting. $392.7m **Excluding the benefit of IFRS 16, 2019 EBITDA 2018 24% margin would have been 44.3%.

CABLE AND OTHER MOBILE (’000) Service revenue* $m El Salvador Others FIXED (’000) Organic growth –6.2% $2m 4G smartphone Home customer data users 2019 $349 Cable and relationships1 other ﬁxed 924 2018 $371 $125.2m 274 As of year end 2019 As of year end 2019 EBITDA $m Organic growth –4.4% Service 1 299 Net additions 2019 $140 Revenue Net additions +47.8% 2018 $133 +0.4% YOY Growth YOY Growth EBITDA margin**% *Organic growth represents year-on year-growth excluding 2019 36.2% Mobile the impact of changes in FX rates, perimeter, and accounting. $221m 2018 **Excluding the benefit of IFRS 16, 2019 EBITDA 32.9% margin would have been 33.0%.

Costa Rica CABLE AND OTHER Cable and FIXED (’000) other ﬁxed Home customer $151m relationships1 256 As of year end 2019 Service Revenue

1 Includes HFC, DTH, Copper and other technologies.

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CABLE AND OTHER MOBILE (’000(’000) ) ServiceService revenue revenue $m $m NicaraguaNicaragua OthersOthers CABLE AND OTHER MOBILE OrganicOrganic growth growth 9% 9% $0m$0m FIXEDFIXED (’000) (’000) 4G4G smartphone smartphone CableCable and and HomeHome customer customer datadata user userss 20201919 $151$151 otherother ﬁxed ﬁxed relationshipsrelationships11 $20.7$20.7mm 785785 20201818 $1$144 1313 AsAs of of year year end end 2019 2019 AsAs of of year year end end 201 20199 EBITDEBITDAA $m $m ServiceService OrganicOrganic growth growth –98% –98% RevenueRevenue 20201919 $68$68 20201818 $4$4

EBITDAEBITDA margin margin % % MobileMobile 20201919 $130m$130m 43%43% 20201818 28%28%

Our 2019 Financial Performance in Africa During 2019 we continued to execute our strategy to improve our financial performance and the returns we generate on the capital we have invested in the region. This includes selling lower performing businesses in our Africa segment, where our return on capital has historically been less than in our Latin America segment. In line with this strategy, we successfully divested our operation in Chad in 2019. In addition, we supported Jumia and Helios Towers Africa, two companies in which Millicom holds minority interests, as they completed IPOs and listed their shares on the New York Stock Exchange and the London Stock Exchange, respectively. Following the disposal of Chad, our Africa segment now comprises our operation in Tanzania, representing 6.0% of underlying revenue2 and 4.8% of underlying EBITDA2. During 2019, we made significant progress toward preparing our Tanzanian business for an IPO of 25% of its shares on the Dar es Salaam Stock Exchange, as mandated by the Tanzanian authorities. Following receipt of the necessary government approvals, we successfully combined our three operating subsidiaries into a single operating entity, and we secured long-term debt to support future growth. Finally, we have filed a prospectus and await approval by the local authority to complete the IPO. Africa organic service revenue2 declined 2.9% (2018: 5.8% growth) during 2019, partly attributable to lower interconnection rates, which resulted in a reduction in our ARPU. Our EBITDA2 decreased 19.9% (2018: growth 7.7%).mainly due to a regulatory fine.

Africa ($m) 98% Mobile –1% $372m Zantel Service revenue Organic growth –2.9% $382 Revenue by country Service Revenue EBITDA Organic growth –19.9% 2% –3% B2B $122 Tanzania $9m

The comparative 2018 financial information in this report has been adjusted for the classification of our operations in Chad as discontinued operations. We disposed of our operations in Chad on June 26, 2019.

1 Includes HFC, DTH, Copper and other technologies. 2 Non-IFRS measure. Please refer to the non-IFRS disclosures in this annual report for a description and for a reconciliation of non-IFRS measures.

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Supporting Our People BLENDING ACQUIRED Our 22,000-plus full-time employees and 30,000 contractors embody OPERATIONS INTO our “Sangre Tigo”; they are the lifeblood essential to our culture, busi- TIGO WITH OPENNESS ness and success. As one of the largest companies in Latin America, AND RESPECT we embrace our role in fueling region-wide economic development and individual prosperity through the career opportunities we create. The integration of almost 3,000 new Therefore, we strive to be the employer of choice across all our mar- employees from Cable Onda and kets by building a culture inside of Tigo where passionate, committed Telefonica in 2019 came with both individuals are empowered to drive positive change and where they opportunities and inherent risks and are encouraged to succeed. challenges. To ensure the mergers succeeded, we formed an intentional This work was particularly critical over the past year. Millicom’s 2018 strategy that included the following acquisition of Cable Onda in Panama and 2019 acquisition of steps: Telefonica’s operating subsidiaries in Panama and Nicaragua spurred » Launched a new Business Integration our rapid market expansion and added almost 3,000 experienced and Office, comprising people of various valued employees to our team. nationalities from the new entities and Tigo, that worked with HR and other key departments to create a values-driven process based on transparency, balanced representation, equity and fluid communication “I can’t imagine working in any other place. » Took the time to get to know the countries and the new employees and to I’ve had opportunities to work in seven learn from each other through interviews and meetings countries with people who believed in me and » Hired external advisors Spencer Stuart challenge me to grow professionally.” and Boston Consulting Group to help us evaluate the skills of managers and executives from Telefonica alongside Carolina Bernal those of current Tigo employees with Chief Financial Officer, Tigo Une Colombia potential to take on leadership roles in Carolina joined our company 26 years ago, mailing invoices to customers our merged operations in Paraguay while she was still in high school. » Created a steering committee that reported to our CEO and was charged with ensuring we built leadership teams with the right levels of cultural diversity, “ local market knowledge and understanding of our core business objectives Ultimately, we believe this thoughtful process enabled us to create teams with an optimal blend of strengths coming from both sides and to retain a high percentage of key executives from the former Telefonica operations.

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Our HR Strategic Pillars We are proud to have been recognized in recent years as one of the best companies to work for in Latin America. To strengthen the foundations of our company and continue cultivating a great place to work, our HR organization implemented a four-dimensional strategy in 2019: » Grow our talent across Millicom and cultivate a diverse pipeline of future leaders within the company » Evolve our culture to be even more inclusive and strengthen our lines of engagement with all our employees » Optimize our organization as it grows, which includes smoothing the integration of people from acquired companies and aligning all our resources with Millicom’s strategic priorities » Build operational excellence by streamlining our HR processes and giving employees more convenient, digitized access to services and benefits These four priorities guide our responsive approach to creating exceptional experiences for our invaluable people and advancing the company’s purpose.

Grow Evolve Optimize Operational Talent Culture Organization Excellence

“We are one of the most recognized brands in Latam, and one of the largest taxpayers in most of the countries we serve. Being such an important force in these developing markets carries an incredible responsibility that we take seriously. Our Employee Value Proposition provides amazing opportunities for our people to transform their lives and ultimately their communities.”

Susy Bobenrieth Chief Human Resources Officer, EVP “

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Pathways to Leadership SHAPING and Career Growth TOMORROW’S LEADERS We recognize that inspired employees produce excellent results. As we build Millicom’s teams in our ever-evolving markets, we must create meaningful incentives that attract, WHERE: All markets retain and develop the best talent to maintain our competitive edge. This includes finding new ways to motivate employees WHAT: Identifying career paths for our and develop their talents—both personally and professionally. top talent to advance their careers at Millicom and continue to produce Our focused approach to leadership and talent development exceptional results for our company. centers on promoting team-oriented, committed employees— HOW: As part of our yearly Organizational those who consistently produce exceptional results in the face Talent Review process in 2019, we of “sink-or-swim” challenges. We are the first-ever employer for launched the Plan 100 strategy to develop many of our people, and some of our most senior leaders the next generation of senior executives started their careers on the front lines of Tigo operations. As and reduce organizational risk from turnover in top leadership positions. We we identify people with high leadership potential, we invest in believe many of our future C-suite leaders creating more opportunities for them to expand their skills and senior managers are already here at through on-the-job experiences in different areas of our Millicom and that our company is more company. (See related highlight story on this page) successful when we have a strong bench of talent with the right skills to ascend our Along with rewarding these employees for their commitment leadership chain. and supporting their long-term career growth, our promote- from-within approach also helps us reduce costly and Through Plan 100, we analyze: » disruptive turnover. During 2019, we retained 88% of our The top-25 leadership roles, from the CEO down employees compared with 84% in 2016. » The 25 people currently in those roles » The top 25 people with high potential to become future leaders » The 25 “springboard” jobs that place “Millicom has given me the employees in an ideal position to develop skill sets that will enable them to move opportunity to live and work in into a top-25 leadership role We are creating new executive team totally different environments development tracks and succession plans than I was used to. That allowed that bring timely opportunities for highly successful general managers and regional me to grow, to strengthen my leaders to work in new environments with greater responsibilities. Plan 100 also resilience and to become a supports our efforts to identify possible talent gaps across the organization and to better person.” develop a deeper pool of individuals within Millicom to fill those roles. Pablo Guardia General Manager, Tigo Bolivia,

Who started as a sales supervisor in 2002 and helped manage several of our African operations early in his career. “

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Bringing “Sangre Tigo” to Life At Tigo, we are proud that our work has purpose. We transform lives and communities by increasing access to digital highways for millions of individuals and hundreds of thousands of businesses. Our employees are at the heart of this transformation. They are the passion and fuel that serve our purpose and the essence of what we call Sangre Tigo. Sangre Tigo is the DNA of our company culture. It is our identity today and our continued aspiration for the future. A 2018 survey involving more than 11,000 employees within the Tigo leadership team and across all our markets provided the foundation of our Sangre Tigo cultural framework. In 2019, we solidified this framework by clearly articulating Tigo’s four pulses, which encompass the key values, practices, behaviors and beliefs that we all share. To bring Sangre Tigo to life, in 2019 we initiated a series of dynamic and interactive workshops designed to provide employees with clarity on our workplace culture and values. We expect to have rolled out these workshops to all our operations by the end of 2020.

Sangre Tigo Cultural Framework

PULSES

We make it We give 1,000% We are TIGO runs happen the for our ONE TIGO in our veins right way customers

BEHAVIORS

We have one purpose We are proud of We lead by example Our customers are and we make an impact our company and and we do what at the center of our history we preach everything we do We are inclusive and united We are innovators We never compromise We are direct, our integrity honest and open Together we win We are fast and we go the extra mile We are transparent We always do it right, We value our and accountable from the first time differences We are passionate We find solutions We make decisions We manage Tigo We care for our and deliver results based on data insights assets as if they communities were our own We see challenges We think, act and as opportunities live digital

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What does Sangre Tigo mean to our ambassadors? “Sangre Tigo is something magical and incomparable, it 11,000+ represents the passion which Employees trained in our we work in day-to-day and Sangre Tigo cultural framework through December 2019 the satisfaction that comes from working with different people who converge on a single feeling. It is a challenge for me to have the 170 Sangre Tigo employee responsibility to strengthen ambassadors this passion in all Tigo employees, I feel very motivated to achieve it.” Mayra Rodríguez B2B Productivity Head, Honduras The Value of Volunteerism Caring for the communities we serve is a value embedded in our Sangre “ Tigo culture and our company’s very purpose. We deepened our commitment to this value in 2019 by instituting a policy to provide up to 2 days of paid time annually for all our “For me, Sangre Tigo is full-time employees to volunteer on ethics; it’s passion for the behalf of local organizations. Many of our people choose to give things I do, and the joy of back to communities through our knowing that we improve Responsible Leadership in Action programs. For example, this year, lives on a daily basis. more than 4,400 employee volunteers helped entrepreneurial women, To be an example and teachers, and children of all ages to adopt digital technology in ways that solution for my customers transform their lives and elevate their communities. Working directly with and colleagues, and be able communities not only demonstrates to replicate the Sangre Tigo how we live our Sangre Tigo values, it also brings deeper meaning and lifestyle”. purpose to our employees’ day to day work and inspires them to do their Leslie Rosales very best. Learn more in the Fulfilling Sales supervisor HFC, Costa Rica Our Corporate Responsibility section on pages 34-49. “

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Building a More Diverse and Inclusive Workplace Our newly articulated Sangre Tigo culture framework This process confirmed that our company is rich in encompasses our foundational commitment to ethnic diversity—with 38 nationalities represented respect all people at Millicom. The value of diversity among the 200+ employees in our Miami regional and inclusion to our business reaches far beyond a office alone. We also uncovered areas of opportunities simple belief in doing what’s right. We believe that an to improve our work environment related to gender inclusive workplace culture attracts talented equity, sexual orientation and age. We emerged with a professionals and empowers them to innovate and strong conviction that we must do even more to contribute their perspectives and experiences in a ensure all employees feel included and valued at supportive environment that values people’s Millicom. Our next step on this journey is to form a D&I differences. In turn, our business, products and Council with broad representation across our cultural services benefit from being truly reflective of diverse spectrum to help Millicom’s senior leaders set the customer and community interests. priorities of our new D&I strategy. We will focus on In 2019, we launched a two-year initiative to define leadership development and opportunities for all and the essential components of diversity and inclusion ensuring that all employees feel their voices are being (D&I) in Sangre Tigo culture and establish a new D&I heard. strategy. Our HR leads, in conjunction with the Boston Consulting Group (BCG), gathered insights from Millicom employees company-wide to understand their present experiences of D&I in the workplace.

We are one Tigo. We are inclusive and united, we value our differences, we have one purpose and we make an impact.

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Transforming Our HR Processes As we continue moving into new markets, we also need to support a larger and more dispersed employee base. This challenge has led us to review Millicom’s HR systems with the goal of enhancing our process transformation and ensuring that our practices comply with specific areas of the Sarbanes-Oxley Act and other financial accounting and reporting requirements of the NASDAQ Stock Market in the U.S.. We engaged Deloitte Consulting in 2019 to help identify opportunities for greater efficiency, consistency and accuracy in our current systems and practices. When finalized, this assessment will guide our development of a company-wide operating model that can support one global HR information system. It will provide self-service access to employees as well as simplify, automate and standardize HR processes across all operations and countries. We plan to implement this new environment in 2020.

Promoting Health, Safety and Wellness Many of our employees live and work in emerging markets where security issues— including civil unrest, armed and organized criminal activity, and terrorism—may compromise personal safety. We seek to minimize such threats and maintain a safe workplace environment by enacting a wide range of controls and promoting actions that help keep our people out of harms way. Millicom has managed the health, safety, and well-being of employees based on international (OHSAS) standards and industry best practices, with advice and support from local authorities, and is currently transitioning to ISO 45001. Our central security and safety team empowers and trains operational teams, and every market has a professionally trained and certified physical security and health and safety officer. All third-party vendors and partners must abide by our security and safety standards. For the fourth straight year, we improved our supplier due-diligence and vetting processes and conducted comprehensive compliance audits for those suppliers considered to be at greatest risk of significant health, safety, and security issues. The systems implemented also provided the operations the relevant frameworks to identify improvements to further reduce the risk of injury, illness and fatal incidents. In 2019, most operations in Latam and Africa transitioned to and received certification for the new ISO Health and Safety 45001 standard. We expect to have all operations certified by the end of Q2 2020.

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Our Business Strategy and Performance We continued generating robust financial returns and socioeconomic benefits in our markets in 2019 by staying relentlessly focused on our business strategy, which is designed to propel long-term, stable growth in six interconnected areas.

Millicom CEO Mauricio Ramos chats with Panamanian football star Jaime Penedo via a real-time holographic call, the first ever in Latin America, using 5G technology powered by Ericsson.

Monetize Mobile Data Our 2019 Telefónica acquisitions added new mobile markets in Panama and Nicaragua. Through our expanded 4G/LTE network—which now covers 69% of people in our Latam markets—we are connecting 15 million 4G mobile customers to content and experiences from providers such as Amazon Prime (see highlight story on page 26) as well as through our own TigoONEtv and Tigo Sports content services. Our network and datacenter investments in 2019 have also set the foundation for us to become the leading 5G operator in Latam as the standard evolves and market demand grows in the coming years. We are piloting 5G capability in Panama, Colombia and other countries with telecom partners such as Ericsson. As we accelerate our transition from a prepaid to a postpaid subscription model, these new products and services help stimulate customers’ data usage and bring in additional revenue.

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Build Cable TRANSFORMING Having completed the acquisition of Cable Onda at the end of 2018, PUBLIC HEALTHCARE Tigo’s fixed network now passes more than 11.8 millions of homes in ACCESS IN PANAMA Latam. Our expanded hybrid fiber coaxial (HFC) network meets growing demand for high-speed data from business and consumer subscribers. WHERE: Panama With a cable footprint that now extends uninterrupted from WHAT: Working with the Caja Del Seguro Guatemala to Colombia, we can drive even greater operational and Social (Social Security) agency in Panama logistical efficiency in our network. Our larger scale and broadened to create a fully digitized medical radiology platform that simplifies and speeds coverage enable us to deliver improved service and more content information sharing with medical options for customers while keeping our prices competitive. Our cable practitioners. Cable Onda launched the and other fixed services business generates aproximately 40% of project in 2014 and Tigo continues to Tigo’s Latam revenue. implement it. HOW: Physicians and other practitioners can access digitized x-rays and medical records on mobile devices while attending Prepare for Convergence to patients who might otherwise have to With integrated fixed and mobile networks in all nine of our Latam travel further from their homes to be seen at a larger medical facility. Tigo manages markets, we have tremendous room to grow our portfolio of converged the platform and provides maintenance services that customers can seamlessly access as they move between services for all the biomedical and work, home and leisure. In 2019 we created new agreements with technological components of the initiative. partners such as Amazon Web Services that enable us to provide a RESULTS: hybrid public/private cloud infrastructure with enhanced content and » 5.1 million patients observed since 2014 data access as well as improved security for businesses and public- » Replacement of analog equipment with sector organizations. 185 digital radiology units » More than 90 new remote digital stations across the country help radiologists serve patients more efficiently » 700 doctors and technicians trained on the new platform » Reduced time patients had to wait for laboratory results from 45-60 days to seven days or less » Images and diagnostic notes integrated into the patient’s digital file, reducing errors and costs associated with transferring and storing medical records

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Accelerate B2B Our high-speed fixed and mobile networks now pass approximately seven out of ten businesses in our Latam markets. In 2019, we focused on growing B2B adoption of our secure and reliable network capabilities. In the process, we increased our Net Promoter Score (NPS) among business customers by 9.6 pts from January to December 2019. More companies are choosing the communications, datacenter, cloud and business continuity services that Tigo Business provides. Our fiber ring, which connects the 13 countries from United States to Argentina and Chile, enables us to deliver high availability, consistent support and greater resilience for multinational companies— leading to greater satisfaction for their customers. Our offerings to small and midsized businesses (SMBs) also grew in 2019. Building upon the success of our first-ever SMB convergent offer that Tigo Business rolled out in Bolivia in 2018, we extended these capabilities to SMBs in Honduras in 2019. For a fixed monthly price, customers can purchase a service package with internet, HFC, mobile and cloud solutions tailored to their individual needs.

4G NETWORKING IMPROVES COLLABORATION AT BANCOLOMBIA

WHERE: Throughout Latam WHAT: An entire virtualized network that integrates Bancolombia’s telecommunications, business processes, data and content across 10 countries. HOW: Tigo has served Bancolombia, one of the largest financial institutions in Latam, since 2014 when we merged with broadband and telephony provider UNE. In 2019, we implemented a set of networking solutions that enables Bancolombia’s 46,500 employees from Colombia to Jacksonville, Florida, to communicate and share information more flexibly. Our platform applies software-defined wide-area-network (SD-WAN) technology along with 4G mobile networking capabilities to enhance and secure the bank’s telecommunications. The results include: » Connectivity for 695 Bancolombia branches and six administrative offices » Integration of instant messaging, audio, video, and web communications among bank employees » Faster and more efficient customer service » Added voice capabilities at bank ATMs

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HIGH-PERFORMANCE, ENERGY-EFFICIENT LATAM DATACENTERS

As part of our strategic plans for delivering faster, more reliable and more secure services, we have invested more than $68 million in improving our datacenter infrastructure to world-class standards throughout Latam. These new datacenters deliver improved uptime for the Millicom cloud environment which, in turn, provides better service to our customers. 2019 Highlights: » Completed five new datacenters as of December 2019 » Closed two older facilities in Honduras and one in Colombia, with plans to close four more in Latam in 2020 » Incorporated three Tier III-certified datacenters in Panama that were part of the Cable Onda acquisition completed in 20% early 2019 Additional reduction in energy » Earned a CEEDA Level Silver Energy use through replacement of Efficiency certification from Datacenter legacy technology in our Dynamics for our new Paraguay datacenters and network datacenter and began the certification process for four others Along with the benefits they create for our business-to-business (B2B) customers, these new and upgraded datacenters, combined with the decomissioning of older facilities, will reduce Millicom’s energy consumption, GHG emissions and operational costs—signifying our commitment to adopt business practices that minimize our environmental impact. “We are proud to be a The new datacenters are 40% more leading operator investing in efficient than traditional sites due to the use of higher-efficiency equipment and the technology infrastructure in implementation of real-time energy management software, which is running at Latin America for the long our datacenters in Paraguay and Bolivia, and will soon be rolled out in Colombia, term. We believe this strategy Guatemala, Panama and Honduras. and investment will make us a premier provider of B2B solutions in all of the markets where we operate.”

Xavier Rocoplan Chief Technology Officer “

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Go Digital We are evolving our digital tools and operational model to be more efficient for our internal teams. We’re also creating simpler and more satisfying digital avenues for our customers to interact with us. Through our e-care support platform, Tigo customers can now resolve 80% of the most common service and account issues—including plan upgrades, username/password resets and billing questions—on their own. In 2019, we also started to connect the Tigo ecosystem with digital platforms such as WhatsApp and Google Mobile Android, which allow even more users of our prepaid mobile services to check their balance and recharge their account without having to install the Tigo app. In addition, subscribers in every country can now pay their bills online using Tigo Money, our mobile wallet app. They can also renew Tigo services from home through their set-top box and set up automatic payments using a variety of methods. By digitizing our activation process and requiring fewer manual steps, we can bring services into customers’ homes more quickly and efficiently.

AMAZON PRIME AND THE “CONTENT SUPERMARKET”

WHERE: All Latam markets “We are bringing customers the seamless WHAT: Bring an unprecedented wealth of and always-connected experience they digital content to our audiences through partnerships with Amazon Prime and expect, with access to premium content from Google Android around the world through Amazon Prime. HOW: Tigo subscribers can now stream videos, music and other offerings from Together with our fast-growing TigoONEtv Amazon Prime through their set-top boxes and on mobile devices. Through another and Tigo Sports offerings, we’re creating a new partnership with Google Android, we added Android TV to the TigoONEtv virtual ‘content supermarket’ that provides service. more options and flexibility than ever.” These groundbreaking partnerships give Latam residents access to globally Luciano Marino sought-after content for the first time— Vice President of B2C Initiatives providing greater customer choice and bringing additional returns to Tigo on our investments in 4G and cable. “

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Provide the Best Customer Experience Beyond offering more digital self-service tools for customers, we are working to create an even more customer-centric culture throughout Millicom. Our 2019 efforts included gleaning more actionable details about customer satisfaction and needs through our various touchpoints—online, by phone and in person. We’re using these insights to create more effective support behind our products and services—which contributed to a 9 points rise in Millicom’s overall NPS this year. As a result of better understanding our customers, and to garner even more granular knowledge about their needs and experiences, in 2019 we introduced nine new customer service interaction evaluations to our experience model and improved the way we interact with our customers in existing channels.

A CLEARER VIEW OF HOW OUR NETWORKS PERFORM

WHERE: Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Paraguay WHAT: Enhancing how we measure network performance and use that information to continuously improve our customers’ experiences. HOW: We use Tutela’s crowdsourced mobile network quality data—collected from more than 10 million mobile devices in the region—to benchmark our signal strength and quality, device usage and download speed patterns. This helps us better understand how users are experiencing our fixed and mobile networks, troubleshoot network performance issues and identify key areas for investment to improve our quality of service.

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Risk Landscape As an international mobile and cable services company operating in emerging markets, predominantly in Latin America, managing risk plays a significant role in our decision-making. The developing, and sometimes volatile nature of the markets and economies in which we operate, exposes us to an inherently higher level, and potentially different set of risks than similar companies operating in larger, more established and mature economies. In addition to risks associated with our geographical footprint, rapid change in mobile telephony and cable technology can have a significant impact on the demand for our services, and our ability to generate sufficient returns on the investments we make.

Risk Appetite As a consequence of these factors, we have a higher risk appetite than many of our peers in the telecommunications and cable industry, and a wider risk profile than many international businesses. We accept the risks inherent in our businesses and markets to the extent that opportunities for sufficient returns exist, and on our ability to adopt appropriate systems and controls to manage those risks.

Risk Management Our consideration of risk plays a critical part in reducing uncertainty. This supports decision making in the allocation of capital and resources, which increases the likelihood of successfully formulating and executing on the right strategy. We carefully align our approach to balancing risk with reward to protect our stakeholders and deliver sustainable value. We approach risk management consistently across the entire business, identifying and managing risks strategically at the Board and Senior Management levels and through in-depth processes and at transaction level by key business unit leaders and staff in our operating countries. We embed risk management processes in our operations both geographically (by country) and functionally (by business area), developing and implementing action plans that seek to balance risks with returns, within pre-determined risk appetite levels. Key risks are determined based on likelihood or occurrence and impact to the business, based on a number of financial and non-financial criteria. These criteria include the potential operational, financial, reputational and human impact of the risk. Each risk is owned by an individual risk owner at the relevant decision-making level. For example, key risks of the Group are owned by members of the executive management team, whereas key risks of each country are owned by the leadership team of each country. Oversight of the Group’s key risks is provided by the Board and its Committees, while oversight of key risks in the countries is provided by the executive management team and the central functions.

MILLICOM’S RISKS ARE CLASSIFIED INTO SIX BROAD CATEGORIES:

Strategic Financial Operational Political and Governance, People and Regulatory Compliance and Culture Reputation (conduct)

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Evolution of risk in 2019 Key events in 2019 have had a significant impact on the risk profile of the Group – in particular, inorganic strategy, financial structure, and growth. However, many of these changes are due to the successful execution of Millicom’s operational strategy and investor proposition plan. The company started the year with the re-listing of its shares on the NASDAQ Stock Market in the U.S. Many activities were undertaken in 2018 to ensure that governance structures are fully compliant with the relevant rules and regulations. In 2019 significant focus was placed on improvements in the control environment (including fulfillment of requirements under the Sarbanes Oxley Act). In Q1 Millicom announced the agreement to acquire mobile businesses in Nicaragua, Costa Rica and Panama, and the sale of its business in Chad. The portfolio of businesses has therefore continued its shift toward Latin America and in particular increased its exposure to Central America. The ability to successfully merge and integrate the acquired businesses is a key opportunity and challenge, which will continue in 2020. Political and economic stability are key determining factors in the ability of our businesses to grow and continue to be successful. While the underlying currencies in which we generate revenue remained relatively stable in 2019, political and civil unrest in some of the Central American countries continued to impact some of our businesses. In addition, toward the end of the year, civil unrest following elections in Bolivia caused instability in the country and temporary disruption to our business. International sanctions and restrictions placed on certain suppliers of devices and equipment were a key focus of risk management activities during the year. A full assessment of the possible outcomes and implications for our business was performed, with contingency plans formulated. This risk will continue to be monitored closely in 2020 as global discussions on national security and communications continue. Information and network access security, including protection of customer data and cyber security in general, continue to increase in importance for all consumer-based businesses. We continued to invest in this area (detailed on pages 97 and 98 in the Governance section) in 2019. Our senior leadership team remained largely unchanged during 2019, a key enabler in executing on our strategy and driving both short-term and longer-term initiatives, including those on leadership, culture and succession planning. While we manage and monitor many more risks within the Millicom risk universe, we have highlighted on the following pages the areas of risk that were a key focus in 2019.

“Our Governance structure and Business Ethics and Compliance programs were key to navigating some of the risks inherent to operating in emerging markets. Doing business in the right way is a fundamental driver embodied in our new “Sangre Tigo” framework and sets the tone from the top.”

José Antonio Ríos García Chairman of the Board of Directors “

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Risk Mitigation and actions Evolution in 2019 Board Perspective (likelihood and impact of the risk materializing)

1. Strategy and strategic direction: Our strategy has been developed Millicom’s growth profile in recent years is based on our vision of building digital a strong indicator that the strategy Uncertainty in the formulation and highways that connect people in our deployed since 2016 is working. In 2019 governance of an appropriate and target markets. We have a relentless the company continued to meet key executable strategy and strategic focus on the six key pillars of our operational targets, including in building direction that supports the vision of the strategy, and monitor execution of the cable, monetizing data, and positioning company. Inadequate processes for strategy with relevant financial and itself with fixed and mobile presence in all gathering and analyzing information in operational KPIs as well as external its LATAM markets.

formulation of the strategy. Likelihood factors such as macro, political and key Relisting on NASDAQ in the U.S. has demographics in our markets. provided an easier path for investment in

Our Board oversees and approves our Impact Millicom’s growth story. strategy and any refinements that may be required. Our strategy is set out on pages 22-27.

2. Portfolio management and We carefully consider opportunities to Building digital highways in growth capital allocation: acquire, merge, or divest businesses economies in Latin America is a key based on market dynamics, portfolio strategic focus. Acquisition or retention of businesses balance, and opportunities for long-term Divestiture of the Chad business and poorly aligned to strategy, overpriced, value creation. and /or generate lower than required acquisition of mobile businesses in Central return on investment. Investment and We are focused on LATAM where we see America in 2019 fit perfectly with these the best opportunities for future growth longer-term goals of the Company.

capital management that enable the Likelihood company to meet its strategic and value creation. In 2018 and 2019 objectives within its financial and we reallocated capital from Africa, and operational capabilities. significantly increased our presence and position in Central America through the Impact purchase of Cable Onda in Panama and the Telefonica mobile businesses.

3. Macro-economic conditions: We actively manage macro-economic While the countries in which Millicom risks in a number of ways. operates in Latam may, from time to time, Volatility or uncertainty in macro- We commission studies on economic experience short-term macro-economic economic conditions (e.g. but not volatility, average GDP growth is forecast limited to; currency, inflation, and development and prospects in our countries, we consider currency to be in the range of 2%-4% per annum remittances) and underlying drivers through to 2028. impacting our markets and the volatility in our budgeting, forecasting,

disposable income of consumers, and tax and treasury management Likelihood Currency fluctuations are a key risk the currencies in which we generate and processes, and we raise debt in local inherent to Millicom’s business. The Board remit cash flows. currency where it is available.. oversees management’s processes and See page 10 for a review of the Impact controls governing financial and financial performance in 2019. macro-economic risk against pre- determined levels of risk appetite.

4. Political, civil and regulatory We closelty monitor politial Political and regulatory risks for Millicom’s environments: developments in the countries where businesses remain relatively high in many we operate and review potential of our countries, particular those seeking Instability, unrest, or lack of changes in regulations on an ongoing to increase income from the predictability in regulation or rule of law basis. telecommunications industry. in the countries in which we conduct business. Uncertainty in regulatory and A number of countries in our footprint In 2019, the imposition of regulatory fines tax rulings, including indirect taxation held planned government elections and lack of transparency in certain and regulatory pressure through tariffs, during 2019. The election result and countries signaled a continued trend of taxes and service penalties. ensuing civil unrest in Bolivia had a increasing risk in this area. short-term negative impact on our Likelihood The Board oversees Millicom’s interaction ability to provide services to our with key governmental and regulatory customers. agencies, and promotes transparency and Impact We implement efficiency programs in predictability in regulation. The Board all aspects of our business to offset the sponsors doining business in the right impact of newly introduced or way. expected changes in taxes and regulations.

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Risk Mitigation and actions Evolution in 2019 Board Perspective (likelihood and impact of the risk materializing)

5. Competition and customer With a focus on home penetration, and In a world where demand for content, experience: 4G subscriptions, Millicom also has access to information and communication partnerships with key content and services is increasingly critical in Market structure, market position, service providers such as Netflix and enhancing and improving lives, positive actions taken by competitors, and Amazon, as well as broadcast rights customer experience is a vital attribute. customer experience have a significant including football in many of our ‘Best Customer Experience’ is one of the impact on attracting and retaining markets. customers. Lack of attention to market key pillars of Millicom’s strategy, and a key and customer needs or poor customer In recent years we have implemented differentiator in customer choice of experience negatively impact the processes and tools to continuously operator. track customer satisfaction across all

subscriber base, and operator Likelihood Millicom’s comprehensive customer reputation. our markets and services, and use this satisfaction program in place facilitates a data to refine and enhance our continuous cycle of improvement across Competition for mobile and home customers’ experiences. Impact all facets of customer experience in all subscribers continues to increase, while See page 27 for information on how operating markets. prepaid customers remain a large and we have invested in processes to important contributor to revenue. improve customer experience and gain Quality of service, innovation and insights. converged offerings as key differentiating factors.

6. Licenses and spectrum: We have a carefully formulated The landscape related to spectrum and spectrum and license strategy and licenses to operate is constantly changing, The availability of licenses and management plan for each of our particularly in our markets as governments spectrum is limited, closely regulated, markets. seek higher financial and consumer and increasingly expensive. We actively monitor and engage with benefits from spectrum auctions, Inability to obtain the required quantity government and regulatory bodies on competition for lower spectrum bands, or band of spectrum from regulators or spectrum and license related matters. and industry consolidation. third parties at a price we deem to be We often negotiate renewals/retention Millicom actively engages with regulators commercially acceptable, could have in the initial allocation contracts and and governments, and promotes fair and significant negative consequences for transparent allocation and pricing of

we carefully consider opportunities to Likelihood the operation of our businesses. acquire new spectrum based on spectrum and licenses. spectrum quality, fit with network needs, and customer demand. Impact During 2019, we successfully obtained and renewed the spectrum we need to continue to operate our businesses, including acquiring new spectrum in Colombia and El Salvador.

7. Financial structure and capacity We carefully manage our sources and Millicom’s financial structure is both a key uses of capital to enable us to meet facilitator and inhibitor of its ability to Millicom may be at a disadvantage our operating, investing and financing grow its business and create value. compared to competitors in access and needs. cost of capital. Risk that financial The Board closely monitors balance sheet limitations such as debt covenants, We manage our debt maturity and structure and the sources and uses of debt service requirements and credit monitor opportunities for lowering our funds in the business. Operating and ratings could negatively impact ability cost of debt and increasing our debt equity free cash flow, leverage, and efficiency on an ongoing basis. shareholder remuneration are key areas of to execute the organic and inorganic Likelihood growth strategy. In 2018 and 2019 we successfully focus of the Board in approving annual raised additional finance to acquire the budgets and monitoring results. businesses in Central America, while Impact maintaining comfortable headroom against covenants and maintaining our credit rating.

8. Networks and infrastructure Our network resilience controls and Millicom’s vision of building digital resilience: mitigating activities include ongoing highways that connect people, improving vulnerability assessments, simulation lives and developing our communities, Disruptions to service, or compromised exercises and business continuity relies heavily on the quality and ability to restore services to customers management plans, tested on a availability of its networks and in acceptable time frames, can cause regular basis. infrastructure. loss of revenue, increase expenses, and Likelihood have a negative impact on customer We develop our investment programs Capital allocation in expanding, experience. with consideration of elements modernizing, maintaining and protecting including outage risks, external networks are vital in the successful dependences, and network Impact execution of Millicom’s strategy. redundancy.

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Risk Mitigation and actions Evolution in 2019 Board Perspective (likelihood and impact of the risk materializing)

9. Technical transformation and With fixed and mobile businesses in Advancements in technology, and convergence each of our strategic markets, we now increasing demand for more and higher have the necessary building blocks for quality services are trends that have Failure to identify / anticipate drivers of fixed / mobile convergence. defined the telecommunications and technological change together with We now deploy more than $1bn each media industries. These trends are adaptability and resource to implement expected to continue and accelerate. change. year in expanding, developing and modernizing our networks and Millicom’s strategy seeks to balance its

Threat of cross-industry convergence infrastructure to enable customer Likelihood short-term operating and financial goals and further commoditization of growth and enhance customer with key technological and existing products and services. Strategic experience. transformational investments that will Impact risk of ‘betting on the wrong To learn more about our business ensure the business remains strong and technology’ or ‘missing the technology strategy and goals to prepare for prepared for the medium and long term. of the future’. convergence see pages 22-27

10. Cyber security and data We have established a Global Cyber security attacks have emerged as a protection: Information Security Office and Global significant threat to the successful Security Operations Center to centrally operation of any organization, particular Intrusion into systems or networks and manage and coordinate risk mitigation those that rely on information systems to inappropriate access to sensitive data related to cyber security and data collect, process, and manage date. could have significant operational, protection. regulatory, legal and reputational Innovation, technological advancements implications. We have implemented processes to and an ever increasingly regulatory regularly assess threats and environment heighten risks in this area. Failure to implement systems and vulnerabilities to security breaches, and Millicom has responded by dedicating

processes to prevent, detect and training programs in place to raise Likelihood resources and allocating capital to respond to information security threats, awareness and control consciousness strengthen its cyber control environment. and properly manage data requests of employees. Impact (e.g. from governments and regulatory Learn more on page 98 about the authorities). initiatives we implemented in 2019 to improve protection of critical systems, and ensure compliance with relevant data protection rules.

11. People, workplace and We manage the health, safety, and It is our people that bring our vision to life. well-being: well-being of staff based on Everyday thousands of Millicom international standards, industry best employees and contractors work towards Our geographical footprint sometimes practice, and advice and support from building the digital highways and exposes our employees and contractors local authorities. providing the services that benefit our to situations which may subject them customers and their communities. to physical, psychological or emotional To learn more about our approach to

harm. employee health, safety, and security Likelihood We recognize the importance of ensuring see page 21. that Millicom is a place where our people can feel safe, protected and supported in Impact ways that enable them to do well, and enhance their lives and the loves of those around them.

12. Conduct: Through clear policies, training and Doing business in the right way is a monitoring activities, we ensure that all fundamental driver embodied in the tone Actions and behaviors of our our staff remain aware of the risks to from the top through the organization. employees, business partners and other them as individuals and to the stakeholders impact the Company’s The Board’s Compliance and Business company and know how to act if faced Ethics Committee maintains oversight of reputation, compliance with rules and with risk in these areas. regulations and may impact our ability Millicom’s Compliance program and Likelihood to operate our businesses. See Governance Section of this report initiatives that strengthen controls and for more information on our enhance the culture of compliance in its anti-money laundering, anti-corruption business and with its business partners. and other business ethics action items Impact in 2019.

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Compliance and Business Ethics Corruption in government and the private sector can raise potent risks for our business that we must counter decisively and transparently in order to protect our reputation, maintain stakeholders trust and sustain our long-term growth. Our ability to operate in the heavily regulated telecommunications industry and maintain a competitive advantage also hinges on diligently adhering to requirements that often vary considerably between different markets. At Millicom, we maintain a zero tolerance for any form of corruption. Our Ethics and Compliance Group meets these challenges by setting 328 the highest standards of integrity, backed by clear guidance and Cases reported on support for our employees in upholding our expectations. Along with Millicom Ethics Line our Board and Executive Team, the group provides front-line protection against legal, financial, regulatory and reputational missteps that could interrupt our operations and jeopardize our customer relationships. As Millicom completed the acquisitions of Cable Onda in Panama and Telefónica’s Central American operations in 2019, much of our 97% attention went into training nearly 3,000 new employees from those Employees trained in our companies on our Code of Ethics and our compliance policies. We conflict of interest policy presented a series of face-to-face training sessions at the former Cable Onda and Telefónica operations to ensure that senior leaders and individuals whose roles carry a higher level of compliance or ethical risk fully understood our ethics policies and procedures. Most other employees completed online training as a mandatory part of their overall onboarding experience. One of our focal points for all Millicom employees who interact with customers, suppliers and other stakeholders is how to recognize and avoid potential conflicts of interest. We also want to ensure that our people feel empowered and safe to raise any ethical concerns. As a result, 97% of our employees have now been trained in our conflict of interest policy. In 2019, we rolled out country-specific extensions of our anonymous whistleblower hotline and EthicsPoint reporting database for the people in our newly acquired operations. In addition, we hired compliance officers in Panama and Nicaragua. We have seen a steady increase in the reporting of ethics cases in 2019. As we continue to onboard, integrate and train employees from new operations in 2020, we expect this trend will continue. Our group also worked closely with Millicom HR and Corporate Responsibility leaders to help shape the new Sangre Tigo cultural framework (see related story on pages 18-19.) and to establish new goals for our Ethics program. We will use this expression of our corporate attitudes and behaviors—among them, “We make it happen the right way” and “Integrity starts with you”—as one of the touchpoints in our ethics and compliance training to help us achieve our goals.

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Fulfilling Our Corporate Responsibility

Millicom’s purpose is at the core of our corporate responsibility (CR) actions, and always has been. We channel the power of technology delivered through our digital highways into programs that create life-changing opportunities for people and transformative economic, social and educational benefits for communities. We also work with teams across the company to reflect CR values such as environmental stewardship, integrity, inclusivity and respect for human rights in every facet of our business.

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The unrivaled power of mobile technology to connect and improve lives and bring businesses in emerging markets into the global economy cannot be understated. As our business grows through the adoption of digital technologies, so does our ability to fuel even greater opportunities and bring socio-economic progress to the countries where we operate. We do not divorce technology and innovation from human rights, ethics or sustainable development. They reinforce each other. As our markets prosper, our business prospers. “Millicom is leading by 2019 was a pivotal year for our CR efforts on many levels. We put a highly cohesive strategy and framework into action with more specific example by integrating child goals, stronger regional impact and greater reach through rights in its CR framework… partnerships. We are working together to Embedded Responsibility make digital spaces for 2019 is the first year that we managed and reported against our children and young people a refreshed CR Framework and 5-Year Plan. The framework builds on our longstanding commitment to corporate responsibility and the safe place to learn, to play, fulfillment of our purpose. But it is more than just a document— and to connect with other everything we do as an organization related to corporate responsibility now flows from this comprehensive and ambitious plan. Through children and young people.” collaboration between CR, B2C, B2B, technical, procurement, facilities, environmental, human resources and other teams globally and at the Charlotte Petri Gornitzka country level, we brought the framework to life by co-creating specific Deputy Executive Director, United Nations Children’s Fund goals and metrics so that responsible practices are fully integrated into our business and drive our community and industry leadership. “ Regional Impact As part of our integration efforts, we significantly scaled our activities and impact by building on the insights gained from experience and successful pilots to address key socio-economic challenges facing women, children and communities. We leveraged the lessons learned through a multi-year process to replicate and adapt country-level programs to larger regions, advancing each facet of our CR Framework. Our more cohesive and structured approach has already created a greater positive impact in communities—helping people move out of poverty and into the mainstream economy, enhancing quality of life through improved access to education, financial services, and employment. (See stories on pages 43 to 48).

Powerful Partnerships We know we can achieve greater impact and transform more lives when we partner with others, so in 2019 we ramped up our work with regional and local partners like UNICEF and the Crecer Foundation to channel our products, services, financial resources and employees’ talents where they are most effective in elevating communities. Whether it’s women entrepreneurs earning more income, or children learning how to code and responsibly use the internet, stories in following pages provide examples of how, working together with partners, we can move the needle on priority issues for the countries we serve and bring positive benefits to our business as well.

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Our CR Framework Anchored by Millicom’s core purpose, our CR Framework spans five CR Fundamentals within our business and three Responsible Leadership in Action pillars to benefit children, women and communities. Across each of these areas, we have set a Five-Year Plan with specific goals for measuring our progress. Our progress on the CR Fundamentals and Responsible Leadership in Action pillars is featured in this section as well as under Supporting Our People, pages 15-21; Managing Our Business, page 25; and Compliance and Business Ethics, page 33. We also present detailed statistics about Millicom’s CR performance, including how our work aligns with the United Nations Sustainable Development Goals (SDGs), in the tables on pages 50-56.

Responsible Leadership in Action

CR undamentals

Ethics Environment Purpose: Build Digital Highways Empowering that connect people, Protecting Women improve lives Children and develop communities Inclusion Supply Chain

Human Rights

Connecting Communities

“Millicom stands out for the way the company’s purpose, corporate responsibility strategy and reporting are closely bound together and focused on the long-term.”

Dunstan Allison-Hope Managing Director, BSR

“

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SEEDING TRANSFORMATIVE CHANGE WITH OUR $211M SUSTAINABILITY BOND

We believe that by investing to advance socio-economic We’ve also earmarked proceeds from the Sustainability progress and environmental stewardship in the Bond for a range of projects focused on expanding emerging markets that we serve, our actions not only digital and financial inclusion, such as: move communities forward but also sustain our own » Broadening Technology Access: Expand our fixed future success. With the launch of Millicom’s and mobile networks that will extend coverage to Sustainability Bond Framework and the issuance of our unconnected and underserved population. inaugural Sustainability Bond in May 2019, we stepped » Empowering Women: Training more than 200,000 up to further align our financing strategy with CR. women in El Salvador, Paraguay and Bolivia to use Our Sustainability Bond of SEK 2 billion (or about mobile and internet technology as a pathway to $211 million) is the first Green and Social Bond issued employment, higher income and greater potential. from Latin America. It supports initiatives geared » Protecting Children: We have delivered training to toward reducing our climate footprint and promoting more than 60,000 students, parents and teachers in greater digital and financial inclusion for the El Salvador, Paraguay and Bolivia on digital literacy unconnected and underserved as well as the thriving and tools, computer and programming skills, robotics middle class and businesses in Latin America. To be and child online protection. eligible for funding through a Sustainability Bond, all » Improving Supplier Performance: Training more projects must comply with either the Social Bond than 170 of our suppliers on corporate responsibility Principles or Green Bond Principles published by the issues including health and safety, compliance, fair International Capital Markets Association. labor, ethics, eco-efficiency and child rights. We allocated the first year of the bond to a range of The Sustainability Bond Framework gives us a potent projects that encompass distinct social and means of attracting capital from investors who share environmental objectives and benefits. Millicom’s interest in seeding environmental and Our projects under the bond include: social progress in Latin America through our business. » DataCenters: We developed an UPTIME Tier III certified facility in Bolivia, designed to operate at PUE 1.6 and with an estimated power reduction of 40% when compared to our previously existing traditional Datacenter in Santa Cruz. (see related story on page 25).

“At Millicom, corporate responsibility lies at the heart of everything we do. Our updated Corporate Responsibility Framework sets the scope for our focus, and we are excited that we are now able to apply it to our financing strategy as well.”

Rachel Samrén Executive VP and Chief External Affairs Officer “ Millicom 2019 Annual Report 37 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

CR Fundamentals The first element of Millicom’s Corporate Responsibility Framework involves what we believe are the prerequisites for the health of Millicom’s business and the societies where we operate. CR Fundamentals are core to Millicom’s purpose, culture and relationships. They guide our employees on how to conduct business in the right way. Our CR team collaborates with business units across the company to help ensure Millicom is conducting business in ways that maximize our positive impact, manage risk, reduce costs and build lasting trust with key stakeholders. The consolidated approach we launched Responsible in 2019 and accelerated over the past year is generating Leadership in Action strong results across all five areas of our CR Fundamentals.

CR undamentals

Ethics Environment Purpose: Build Digital Highways Empowering that connect people, Protecting Women improve lives Children and develop communities Inclusion Supply Chain

uman Rights

Connecting Communities

Our CR framework and Sangre Tigo are mutually reinforced: we put our people’s talent and passion to the service of fulfilling our purpose and this, in turn, feeds into our everyday tasks and contribution to creating positive ripple effects in our communities.

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Environment NEW LIFE FOR OLD Reducing our environmental footprint and conserving natural ELECTRONICS resources isn’t just responsible business. For us, it’s a strategic imperative as we seek to expand our services and connect more customers to the digital economy while also managing the associated WHERE: All our Latam operations operational costs and keeping our technology affordable to WHAT: Retrieving equipment that can be customers. Our 2023 Environmental goals are laid out as stepping repaired and reused in our network or stones towards a comprehensive and robust environmental approach recycled, to reduce waste and save costs. that we are improving and building day by day, embedding efficiency, HOW: Through our reverse logistics and resiliency and circular economy criteria in our key processes and E-waste recycling program, we recover infrastructure. Customer Premises Equipment (CPE) as From our investments in energy-efficient datacenters (see related customers upgrade or discontinue our service. Our Five-Year Plan for CR story on page 25) and networking equipment to our e-waste recovery Fundamentals set a target of recovering at and reverse logistics initiatives (see sidebar on the right), we are laying least 78% of CPE by 2023 through 3 “R”s: the foundation for sustainable long-term growth and competitive » the need for new pieces of CPE advantage in our markets. As we improve network efficiency, we’re Reduce and thereby avoid the cost and energy also making our operations more resilient in the face of extreme consumption associated with weather events and power outages that could disrupt vital manufacturing new equipment. communications or information access. » Reuse items recovered from customers We took big steps in 2019 to more accurately identify and measure due to service termination or upgrade. the sources of our electricity and fossil fuel consumption as well as our » Recycle as much of our CPE as possible carbon emissions. We’re using this knowledge to continue developing at the end of the useful life. action plans and set reduction targets by 2021. When these approaches are not feasible for the whole piece due to obsolescence or deterioration, we work with vetted waste management providers to appropriately dispose of any remaining materials.

REVERSE LOGISTICS RESULTS IN 2019

69% of units retrieved from disconnections

1,751 tons of CO2 A worker packing emissions avoided recovered CPE, ready to be reinjected in our 1,084.8 tons of plastic waste market, at our partner facilities in Bogotá, diverted from landfill Colombia. 1.1 million cubic meters of water saved

$62 million capital expenditure savings

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El Salvador Tigo campus seen from the air: the solar panels cover a vast area of our roof surfaces, one of the many environmentally-responsible features that make this facility eligible for one of the first LEED-Platinum certifications in the country.

“We always strive to do better than the day before, and we always look to see the big picture. We cannot fulfill our purpose of connecting people, improving lives and developing communities unless we also do our part to protect the environment.”

Mauricio Ramos Chief Executive Officer “

LEED PLATINUM-CERTIFIED TIGO CAMPUS

WHERE: El Salvador The 1,238 solar panels installed will generate 606,000 Kwh per year—equivalent to the energy consumption WHAT: One of our newest offices is also among the of 200 households—avoiding 413 tons of CO most environmentally sustainable and cost-efficient 2 emissions every year. commercial buildings in Latin America. With the installation of the solar energy plant, the HOW: With an investment of over USD 500,000, facility met all the requirements to obtain the LEED Tuscania Corporate & Business Park (TCBP), the (Leadership in Energy and Environmental Design) developer of the corporate campus where Tigo El Platinum certification, becoming one of the first Salvador operates, inaugurated the solar energy projects in El Salvador to achieve this recognition. plant with which they expect to achieve a significant reduction in the campus’ carbon footprint while also reducing reliance on the grid and therefore making the campus more resilient in case of power outages.

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Human Rights We work to respect people’s dignity and safeguard their rights, including freedom of expression (FoE) and privacy. This extends from our role as a digital services and content provider that handles sensitive data for millions of customers, to the workplace standards we uphold with our employees and supply chain partners. To help us follow through on these commitments and identify areas to improve, we regularly seek input from and share best practices with experts, investors, NGOs, other companies and the academic community.

Our Privacy Policy Our Millicom and country websites provide detailed information to our customers regarding our policy and practices, including how we use, process and protect customer data, their rights related to the 200 use of their data and channels and contact points where they can Key Millicom and Tigo staff raise concens about their privacy. trained on Human Rights in In December 2018, we updated our Global Privacy Policy to meet 2019 GDPR requirements and best practices and continued its implementation in 2019. Our Privacy department in our Miami regional office rolled out a “train the trainer” program to local privacy officers, almost 200 key staff in Latam on safeguards related to processing customers’ personal data.

Privacy Protection Tools We also continued to strengthen our privacy processes by implementing a privacy management platform that helps our global and regional legal departments ensure that personal data processing activities comply with applicable laws and our privacy policies and procedures. The platform allows Millicom to determine the types of personal data that are being processed by headquarters and various Tigo operations. We can perform data mapping to determine what personal data is collected, where it is stored, whether it is processed by third parties or transferred to other countries and how long it is retained. The platform creates greater visibility and transparency around how we use personal data across the organization.

Implementation of GNI Principles As part of the Global Network Initiative (GNI), Millicom contributes to solving complex situations in which people’s fundamental rights to freedom of expression (FoE) and privacy come into conflict with government measures. Examples of this include addressing governmental demands to censor content, restrict access to communications services or hand over user data. In 2019, we completed our first-ever GNI assessment, which reviewed Millicom’s efforts to implement the GNI Principles on FoE and Privacy. The assessment report found that Millicom is making good-faith efforts to implement the GNI Principles and that we are improving over time. This is the first time that telecommunications companies have been assessed as part of the GNI and we were among the first to complete the assessment.

Human Rights Impact Assessments Working with Business for Social Responsibility, a global nonprofit consultancy, we began conducting human rights impact assessments (HRIAs) of Millicom operations in Colombia, Bolivia and Paraguay as part of our Five-Year Plan benchmarks and our alignment with the UN Guiding Principles for Business and Human Rights. All our CR teams also received training in human rights issues and the HRIA toolkit process. Each business unit whose activities may impact human rights also received the training. We will continue these HRIAs and trainings in 2020.

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Ethics Millicom’s success is grounded in a culture that reinforces and rewards ethical behavior. We strive to lead our industry in demonstrating the values of integrity, transparency and accountability—not just with each other but also in our interactions with government representatives, customers, partners and community leaders. Acting with integrity, which includes zero tolerance for any form of corruption, helps uphold our reputation and earn stakeholders’ trust. We also recognize that our people can work most effectively in an atmosphere that allows them to raise ethical concerns without fear of retaliation and feel confident that Millicom will treat those concerns seriously. In 2019, members of our CR group assisted the Ethics and Compliance and HR teams with integrating employees from newly acquired companies into Millicom’s values, culture and compliance practices. We also helped formulate better ways to encourage, recognize and reward integrity among people at all levels of Millicom. For example, we built compliance KPIs into remuneration packages for GMs and executive team members. In addition to our work internally, we collaborate with other companies and government leaders on ethics issues. Our strides in 2019 included joining the World Economic Forum’s Partnering Against Corruption Initiative, a cross-industry effort to address corruption, transparency and emerging market risks. More details about Millicom’s ethics and compliance activities can be found in Our Business Strategy and Performance on page 33, Supply Chain on page 43, CR Performance Tables on pages 51,58 and 59 and Governance on pages 67-100,

“We look forward to continuing our leadership as ambassadors for anti-corruption activities while we champion the implementation of high ethical standards among partners and stakeholders.”

HL Rogers EVP Chief Ethics and Compliance Officer “

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Inclusion We are One Tigo—yet also a vibrant tapestry of backgrounds, beliefs, experiences and orientations. People of more than 50 nationalities work here. We value employees for who they are and what they bring to our company, because we recognize that diverse perspectives lead us toward smarter ways of working and inspire us to create more innovative products and services. We all prosper from building an inclusive work environment that not only reflects, but also celebrates, the broad spectrum of our workforce, the markets where we operate and the customers whom we serve. Our CR group works closely with Millicom’s human resources leadership on strategies for fostering greater inclusion—from One of the engineers in our technical teams Jenny Carrasco, adapting workspaces for people with disabilities to promoting Manager Fixed Rollout gender equality and leadership opportunities for women—as Honduras part of the values, beliefs and practices that shape our Sangre Tigo company culture. Learn more about these company-wide efforts and achievements in Supporting Our People on pages 15-21 and the CR Performance Tables on page 54 and 61. 346 Suppliers trained in the CR Program since 2017

Supply Chain How our supply chain partners conduct their business is a direct reflection on Millicom in the eyes of our customers, shareholders and other stakeholders. As we invest in helping suppliers improve their CR and sustainability practices, we also strengthen our reputation, long-term stability and overall efficiency. Our Supplier Code of Conduct requires suppliers to conduct themselves with the highest standards of honesty, fairness and ethics. The Code of Conduct also sets core expectations in the areas of health & safety, environment, fair labor and compliance. As part of the updates to our Code, set for release in early 2020, we simplified much of the language to more clearly state Millicom’s expectations of suppliers and help make our standards more accessible to them. 2019 was our fifth year working with the platform and methodology of EcoVadis, a third-party ratings provider. We evaluate suppliers in key CR areas such as environmental stewardship, labor and human rights, ethics and sustainable procurement. The results enable us to monitor supplier performance in these areas and evolution over time. They are also a key element in customizing action plans for the suppliers participating in our CR training program, described below. Based on the 2023 CR goals communicated at the beginning of the year for supply chain, we are adapting the reporting metrics accordingly. In Q4 of 2019 we delivered the third edition of our Supplier CR Training Program to 117 key suppliers throughout Latam on topics such as Health & Safety, Anti-Corruption; Fair Labor Practices; Child Rights; and Eco-Efficiency. Suppliers each received over 16 hours of direct training aimed at identifying risks and developing action plans to help improve their corporate responsibility performance over time. We also use feedback from suppliers who have completed our training to help shape our overall supply chain program and Code. This year, our local CR and Procurement teams were also trained on responsible supply chain management within the same program but with focus on their end of the process, monitoring progress on action plans created by the participating suppliers.

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Our Responsible Leadership in Action There are more than four billion people unconnected in the world, roughly 60 percent of the global population. Over 95 percent come from emerging markets. These are the people who stand to benefit the most from online connectivity as a means to improve their quality of life and economic opportunities. Once connected, these individuals have the potential to become our new customers and, in many cases, new employees who will fuel our next waves of business innovation and growth. They join a continuous cycle of development, prosperity and giving back in our shared communities. The second element of our Corporate Responsibility Framework focuses on the promotion of a safe and productive adoption of the digital lifestyle by the company’s customers and the communities where we work. Responsible Leadership in Action programs channel the power of our products and the talents and passion of our employees into three initiatives that empower women, protect children and connect communities. These are the areas where we often see the most profound opportunity gaps that prevent people from thriving in the digital realm. They are also the areas where we and our stakeholders believe our company is best positioned to make a distinctive impact.

Responsible eaersip in ction “To be a volunteer is to

CR passionately tackle the unamentals work that enhances the Ethics Environment Purpose responsible, healthy and Build Digital Highways mpoering that connect people, Protecting omen improve lives Cilren creative use of the and develop communities Inclusion Supply internet. We impact Chain communities with our Human knowledge so that they Rights can find in technology an Connecting ally for the development Communities of their lives.”

Hannia Enith Muñoz Rodriguez Digital Specialist, Colombia “

In 2019, thousands of Millicom employees helped energize our Responsible Leadership in Action programs, volunteering over 51,000 hours on projects across the countries where we operate. Along with opening more avenues for our people to contribute their knowledge and skills in 2019, we also focused on expanding some of the most successful projects and approaches into more communities.

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Protecting Children Information and communications technologies provide invaluable and nearly boundless learning and enjoyment opportunities for children. However, young users of technology are also especially vulnerable to harm from inappropriate digital content, cyberbullying, online predators and other threats lurking on the Internet. Our Child Online Protection (COP) efforts help young people understand how to use technology safely and productively. We teach children to maximize the productive use of technology, and recognize and avoid potential dangers on the web so they can continue developing their skills in ways that multiply their lifelong opportunities for education, employment and innovation.

OVER 480,000 CHILDREN LEARN DIGITAL SKILLS, ONLINE SAFETY

Since 2016, through our child online protection For more details on our progress against these and (COP) efforts, we have trained more than other COP targets, please see the CR Performance 480,000 children in the opportunities and risks Tables on page 55. of digital technology. “This activity (COP) is very important In 2019, we consolidated and enhanced our regional COP initiative under the name Conectate Segur@. for the institution because it Building upon the success of Tigo Colombia’s Contigo enables parents to understand their Conectados program, Conectate Segur@ uses interactive quizzes, games, stories and other responsibilities regarding their materials—tailored for children as young as eight and children’s use of social media and up through high school age—to help young people develop safe, productive online habits. The curriculum the internet. For children, it’s also includes lessons on cyberbullying, appropriate use of very important as it can help them social networking, avoiding illegal and inappropriate be aware of how they can make content and recognizing signs of predatory behavior on the internet. better use of the internet for All our Latam markets have rolled out Conectate academic and learning purposes.” Segur@ initiatives in 2019. We aim to reach 70,000 teachers, 200,000 parents and caregivers and Luz Nuyereth Vazquez 700,000 children and adolescents by 2023. Coordinator, Antonio Derka School, Santo Domingo, Colombia

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UNICEF SCHOOL OF INFLUENCERS

Young people look to each other for cues on and UNICEF have collaborated since 2012 to promote what to do and how to act in almost every and respect the rights of children and adolescents in aspect of life. Recognizing that the world of every Latin American market where TIGO operates. technology is no exception, we teamed up with Our other joint projects have included: UNICEF last year on a project that trains » The Mobile Industry Child Rights Impact Assessment young people to guide their peers in staying (MOCRIA) tool, which helps ICT companies better safe—online and offline. understand how our business may affect children and develop action plans to address key issues Launched in Colombia, the School of Influencers » Helplines in Guatemala and El Salvador that provide program is creating a nationwide network of children with professional resources to overcome adolescent leaders who are actively involved in abuse and other situations that endanger their promoting responsible uses of technology and physical or psychological health deterring harmful behaviors. Participants use an online platform hosted by Tigo Colombia to build Millicom’s CEO, Mauricio Ramos, spoke about the their knowledge and engage with peers. By the end of impact of our work with UNICEF at the organization’s 2019, 2,436 Influencers between 10 and 19 years old Executive Board Meeting, which took place during the had been trained in four cities. UN General Assembly in September 2019. Mr. Ramos reinforced our company’s commitment to pooling our “We have to be cyber-aware,” says Carolina resources and skills with UNICEF’s expertise on child Castañeda, a School of Influencers peer leader in rights and its network of local stakeholders to help Soacha. “The internet allows us to travel through improve conditions for young people. different worlds where we can live many emotions, but we must be cautious and responsible.” Beyond the School of Influencers program, Millicom

700,000 Children and adolescents we aim to reach through our online safety programs by 2023

“The School of Influencers seeks to promote good use of the internet through workshops for adolescents, by adolescents. Thus, we strengthen our leadership abilities and generate safe digital spaces.”

María Fernanda Narváez National Leader, School of Influerces, Pasto “

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Empowering Women In many of the communities where Millicom operates, we see a disparity in women’s access to digital tools, content and technological skills. According to GSMA, in almost all low middle and low income countries, “the mobile gender gap extends beyond ownership and access—even when women own a mobile phone, they use a smaller range of mobile services.” 1 We are responding at a company-wide level with services and training specifically aimed at integrating more girls and women into the digital ecosystem. Our approach to closing the gender gap includes equipping women with mobile technology tools, digital literacy and the entrepreneurial skills that will enable them to build lasting prosperity. We’re also broadening women’s access to financial knowledge and resources, such as microloans, that can serve as the springboard for starting or growing their own businesses. In all, we have committed to empowering 400,000 Latam women entrepreneurs between 2019 and 2023 with digital skills to benefit themselves and their families in all of our markets. Our Conectadas program provides women in our markets with training on how mobile internet can connect them with the mainstream society and economy and improve their lives. Initially deployed in Guatemala in partnership with the Sheva Foundation in 2017, we expanded Conectadas to more of our operations in 2019 with the objective of creating a regional strategy and program. In 2019, El Salvador, Bolivia and Paraguay rolled out the Conectadas programs under the same concept and methodology used in Guatemala, and adapted the program to also include women micro-entrepreneurs and Tigo Money agents. Through the Conectadas digital literacy programs that we support in partnership with nonprofit organizations such as Fundemas, women throughout Latin America learn internet and mobile technology skills as well as how to obtain microfinancing for their small-business ventures. Along with contributing technology and course materials to the program, we helped train more than 324,000 women from 2017 to 2019. We have also set a goal to train and empower 26 women micro-entrepreneurs per year in El Salvador to conduct their business transactions through Tigo Money, a mobile tool that advances the digitalization of small and midsize enterprises. As Tigo Money agents, these women will be able to help others complete financial transactions— making them promoters of financial inclusion in their communities. We see the benefits of this transformation rippling through families and entire communities. With greater digital inclusion comes greater opportunities for women to rise above poverty, build confidence and become self- sufficient. The adoption of mobile technology also drives financial inclusion where the unbanked move to safer and more productive financial practices such as mobile money transfers, remittances and bill payments. Meanwhile, we also grow the demand for Tigo products and services throughout the developing countries that we serve.

“My life changed after this training. I learned to organize, to set targets and to use technology…so that my business can do better.”

Sonia Zelada de Girón Tigo Money agent, Librería Los Héroes, El Salvador “

1 Source: The Mobile Gender Gap Report, GSMA, 2019, page 3. https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2019/02/GSMA-The-Mobile-Gender-Gap-Report-2019.pdf

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COMMUNAL BANKING HELPS WOMEN ACCESS MICROFINANCE RESOURCES

Over 159,000 women in Bolivia are gaining communal bank members are all accountable for the greater financial control and stability through repayment of their loans as a group, which helps a new partnership between Tigo and the strengthen their teamwork and sense of community. Crecer IFD Foundation. Tigo Bolivia’s program Conectadas and the communal banking program is part of our regional strategy for helping helped Alejandra Mendoza Perez, 28, gain the skills to boost the productivity of women’s businesses create online advertisements for her small beauty and entrepreneurship through training on salon. With higher income from the ads and other digital tools and technology. improvements to her business, she became able to pay her microloan off more quickly. Participants in Bolivia receive training in how to apply for microfinance opportunities and manage their “I search tutorials to learn new things about products money through mobile banking services. Through the and on beauty salon management. This helps me a lot microfinance program, groups of women set up to improve,” Mendoza Perez says of the training she communal banks through which they can apply for received through Conectadas. “These sessions also microloans and distribute the funds to support each help us to manage our social media accounts safely.” other in launching or growing a small business. These

324,000+ Adolescent girls and women trained through our Conectadas digital inclusion program from 2017 to 2019.

“Women of communal banks are their families’ main productive engine. Their businesses need to be strengthened. In our times, this strengthening is more successful if it goes hand in hand with technology and internet use.”

Isabel Rueda National Manager of Development Services, Crecer IFD “

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Connecting Communities TECH SKILL-BUILDING We believe that connected communities are resilient communities— FOR YOUNG PEOPLE which, in turn, are the best possible environment for people to reach their full potential. Therefore, this pillar of our strategy encompasses and reinforces positive results within our other two Responsible Leadership in WHERE: Bolivia Action focus areas. WHAT: Tigo and our employee volunteers We achieve progress by providing internet connectivity to organizations help students learn computer that can be multiplying agents, such as schools, universities, public programming and create projects to institutions and community centers. To step up our work in communities, showcase their new-found talents. however, we must better understand how our programs are impacting HOW: Our Pixel a Pixel teaches the individuals that are part of them. With this in mind, during 2019 we school-age children “computational looked into ways of assessing the outcomes of our programs and have thinking” skills such as coding, logical developed a pilot program in Paraguay through which we intend to analysis and problem solving. Since 2017, more than 64,000 children and hundreds create a methodology for measuring impact throughout all our of teachers from 135 schools have operations. benefited from Pixel a Pixel. This learning For this project we partnered with Global Infancia, and will focus on the platform is also accessible online at www.pixelapixel.org.bo. impacts that our Telecentros have had on the communities they have been deployed in. The results, which are expected during Q1 2020, will In May 2019, we gave children a chance to give us a clearer view of how our actions can create change in the test their skills and knowledge at our first Technological Fair of Coding Education. communities where we operate, and also provide us with a scalable Nearly 70 children from 10 communities methodology to continue to measure the impact of our programs in the presented computer programming projects rest of our operations. that addressed societal problems and needs in Bolivia. Featured technology creations included anti-bullying resources, digital Sharing Our Energy as Volunteers organizational tools for students and accessibility aids for the visually impaired. One of the most powerful ways that we connect communities is through channeling the talents and passion of our employees as volunteers. We more than doubled our 2018 volunteering hours, with 51,425 hours this year. This was achieved through a more strategic and focused approach. For example, Tigo Paraguay organized a company-wide “Dia V” volunteering event with the goal of bringing together collaborators and beneficiaries of the country’s Telecentros, or technology access centers. More than 700 volunteers at 10 Telecentros locations, which are attended by over 4,000 children, spent the day helping with: » Games that teach children how to recycle » Fun activities designed to start meaningful conversations about risks and opportunities on the Internet » Repairs, cleaning and beautification projects to improve children’s everyday surroundings » Friendly sports competitions to reinforce the value of teamwork and fair play Also, in celebration of International Volunteering Day on December 5, we held simultaneous volunteering activities in all our Latam countries and our Miami regional office, with the participation of over 500 volunteers and benefiting more than 1,400 people. Over 2x Year-on-year increase in total employee volunteering hours

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Corporate Responsibility Performance Tables

We report our progress against the Millicom CR Framework and Five-Year CR plan, which are built on our 2018 Materiality Assessment as well as our ongoing engagements with internal and external stakeholders.

Our Support for the UNs Sustainable Development Goals Millicom supports the United Nations Sustainable Development Goals (SDGs) as part of our commitment to a business strategy that is aligned with the objective of shared and sustainable growth. Our CR framework prioritizes and focuses us on the SDGs that intersect most directly with Millicom’s resources, expertise and ability to add the greatest value in addressing societal needs. The performance tables on the following pages indicate how our efforts connect with, and help advance, specific UN SDGs. This corporate responsibility report includes the Honduras and Guatemala joint ventures as if fully consolidated in accordance with our management reporting. Reported indicators exclude Emtelco, Nicaragua, and our recently acquired Telefonica operation in Panama. Additional exclusions, where applicable, are detailed in footnotes. The majority of our performance data on pages 57 to 63 is reported on the October 1, 2018 to September 30, 2019 basis, except where noted.

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CR Fundamentals Overview

SDG Our Goals 5-Y What we did in 2019 Our performance relevance 100% GMs and executive Since 2018, we have tied the GM 100% of GMs have 16 teams with compliance KPIs Compliance objectives with their compliance KPIs built into 1 built into remuneration bonuses. We want to create the remuneration package. package by 2020. right incentives where integrity is recognized, rewarded and 100% of the above group 16 encouraged. Heatmap and KPI plus their direct reports with scorecards have been presented compliance KPIs built into to the Board of Directors, as a remuneration package by way to assess progress towards Build a strong Corporate 2021. Culture that seeks Compliance objectives. 95% Compliance & Ethics Compliance Excellency; an All operations and HQ deployed 94% of active employees 16 ethics business culture, where training for active training on Code of Conduct and have received Compliance employees at all levels are employees yearly. Anti-Corruption during 2019. & Ethics training.2 committed to doing what is right, upholding the Respond within 3 business The current mechanism allows We are currently responding Company’s values and days to each Ethics Line for visibility of the date an to each Ethics Line 16 standards. allegation submitted allegation is submitted to the allegation within 3 business through hotline. hotline and the date on which a days of being submitted response is logged. through the hotline. Ethics Provide corrective action Where a concern or allegation is Case-specific 16 recommendations for each substantiated, investigation recommendations are Ethics Line case findings and recommendations provided as needed and substantiated through the for corrective action are provided closely tracked. investigation process. to the appropriate review committee. Have a Compliance & Ethics 100% operations with This year we completed the All of our operations have 16 Program that is central to online platform deployed automation of the Conflict of these forms standardized business strategy, effectively and functional for a Interest and Gifts and and accessible.3 embedded in the business high-quality program that Hospitalities forms. processes and procedures, integrates preventive focusing on the actual impact measures, key controls, the company’s Program has reporting mechanisms and in the countries it operates in, due diligence processes on our employees, customers, capable of detecting and stakeholders and correcting misconduct and communities. wrongdoing. Train 100% of Procurement We expanded the Supplier 88% of Procurement staff staff in responsible supply Training Program to Procurement in Miami headquarters Extend related training to chain management issues staff to standardize content and Latam operations Procurement team. related to our core risks by across operations and align reached by the 2023. messages and practices with Responsible Supply Chain those delivered to suppliers. module. Vet all global strategic We have assessed the baselines Out of this group, 56% suppliers through our against our current global already has taken the Enhance due diligence sustainable procurement strategic suppliers and identified assessment and we are in processes by including platform. among this key group who is the process of revising the sustainable procurement already vetted through the lists and planning for criteria for global strategic

Supply Chain Supply platform. 2020. suppliers.

Ensure that 100% Global As part of the above revision, we 46% of our global strategic suppliers obtain assessed how many of our global strategic suppliers already sustainability assessment strategic suppliers already have a have scores of 45 or scores of 45 or greater score of 45 or greater. greater. by 2023.

1 Excludes Guatemala JV, as well as newly-acquired operations of Telefonica and Cable Onda. 2 Excludes recently acquired Telefonica operations. 3 Excludes Guatemala JV, as well as newly-acquired Telefonica operations.

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CR Fundamentals Overview–continued

SDG Our Goals 5-Y What we did in 2019 Our performance relevance Train all suppliers with Group Train all suppliers with In 2019 we focused our training 117 suppliers trained spend >$1.0m by 2023, and Group spend >$1.0m by on local suppliers we consider across Latin America. measure their progress on 2023, and measure their critical and with greater potential corrective action plans progress on corrective of improvement- not necessarily through sustainable action plans through meeting the condition of spend procurement platform and sustainable procurement of over $1M. Further review will be

Supply Chain Supply audits. platform and audits. done to determine the most strategic prioritization criteria for supplier selection. Environmental impact We achieved ISO 14001 standard 100% of operations with 13 assessments executed, certification in all our corporate environmental impact reviewed, revised, offices and in Colombia, Costa assessments conducted. Environmental impact standardized and with Rica, Paraguay, Guatemala, assessments of all operations action plans consolidated Honduras, Bolivia, Panamá, Tigo executed by 2021, including for regional execution by Tanzania and Zantel, with Bolivia issue prioritization and January 2021. and Nicaragua in advanced remediation plans. stages. Environmental impact assessments have been conducted in the framework of this process. Design one pilot project for In addition to different existing We are on track to meet- 13 emissions reduction and one initiatives in our operations, we ing these commitments. 13 for offsetting / carbon are evaluating several pricing by 2020. alternatives for feasibility and are on track to meeting this goal as scheduled. Comprehensive strategy for We are taking the necessary steps Develop and implement a climate change mitigation towards fulfilling this comprehensive strategy for and resilience for Tigo commitment, internally by climate change mitigation operations and customers broadening and accelerating and resilience for Tigo approved and announced collaboration across the business operations and customers. by Q2, 2022. functions that manage related Environment impacts and risks. Externally, in late 2019 we joined the GSMA taskforce #BetterFuture in order to align, leverage and coordinate target-setting efforts with our industry peers to maximize our potential for positive impact. 2018 energy consumption, Baselines have been identified for Our baseline year is 2018 13 Scope 1 and Scope 2 energy consumption and scope 1 and levels are shared on baselines identified and and scope 2 emissions, against page 61 of this report. Enhance data quality and published by 2019. which we are initiating the standardization of calculation target-setting process. and reporting of baselines and targets to reduce carbon 13 footprint and achieve costs Fossil fuel consumption and Baselines have been identified for Our baseline year is 2018 savings and reduce carbon energy consumption energy consumption and scope 1 and levels are shared on footprint. reduction targets set and scope 2 emissions, against page 61 of this report. by 2021. which we are initiating the target-setting process.

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CR Fundamentals Overview–continued

SDG Our Goals 5-Y What we did in 2019 Our performance relevance Reach 78% of Consumer Ramped up our reverse logistics We achieved 69% CPE 12 Premise Equipment (CPE) process across the Latam region E2E recovery across end to end (E2E) recovery1 through standardization of the region, with some by 2023. practices, improved materials individual countries like classification and coordinated Costa Rica, Bolivia and tracking of performance from Colombia already above the supply chain team, the 77% recovery line. broadening the reach we already had through a Manage and measure waste specialized partner in Colombia, streams, and reuse and Costa Rica, El Salvador and recycling of consumer devices. Honduras, including assessment Environment of in-house practices and other partners in operations that work with them. Conduct an inventory of all Conducted a deep dive process An updated scorecard 12 waste generated at to standardize e-waste has been launched in operations and publish management and Q4, which will be a key related targets by 2020. measurement practices. input for the 2020 Annual Report. Consolidate and enhance Corporate and operations Corporate and operations Gap Conducted Gap Analysis human rights policies and Gap Assessment conducted Assessment conducted by Q3 of operations policies and practices covering privacy, by Q3 2019. 2019. processes against UNGPs. freedom of expression, supply chain and vulnerable groups Develop remediation plan Develop remediation plan to to meet United Nations to cover gaps by Q4 2020 cover gaps by Q4 2020 for Guiding Principles on Business for implementation under implementation under and Human Rights standards. 5-year plan. 5-year plan. Human rights training to CR We rolled out trainings on human 200 people trained in Roll out training on human Team by Q4 2019 and rights and Privacy and the use of Miami HQ, Bolivia, Para- rights in all Latam markets extended to designated Millicom’s privacy management guay, Colombia, Costa by 2020. business teams by Q4 2020. tool to designated Privacy Rica, Panama, El Salvador champions in HQ and Latam and Honduras. operations. Training on HRIA toolkit Trained CR Managers and HQ 56 people trained in conducted in all operations Legal, Compliance, Procurement HRIA. Develop and deploy Human by Q4 2019. and Business teams in Colombia, Rights Impact Assessment Paraguay and Bolivia. (HRIA) toolkit in all Latam Human Rights markets. Conduct HRIAs in all Conducted HRIAs in Colombia, 37% of our Latam operations by Q4 2020. Paraguay and Bolivia. operations with HRIA conducted. Develop remediation plan to cover findings of HRIAs by Q2 2021. Develop Grievance Conducted gap assessment of Developed Framework for Mechanisms for customer GMs at HQ and operations. GMs for HQ and privacy or freedom of Operations levels. Protect customer rights to expression issues by privacy and freedom of Q4 2019. expression in accordance with Global Network Initiative’s Develop web-based one Published Global Policy, User Obtained favorable (GNI) Principles and obtain stop Privacy Center for Terms and Conditions, Cookie external GNI assessment positive assessments of our customers on company Policy, and Privacy Notices on report on alignment of policies and practices. policies, terms and MIC and operations’ websites. our policies and practices conditions and practices Launched a management tool to regarding freedom of relative to privacy and assist in the administration of our expression and privacy freedom of expression by Program. Designated Privacy against GNI principles. Q4 2019. Officers and Privacy Champions in HQ and operations.

1 End-to-end recovery excludes obsolete equipment that cannot be reinserted

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CR Fundamentals Overview–continued

SDG Our Goals 5-Y What we did in 2019 Our performance relevance

Build an inclusive work In 2019, we launched a This information provided 5 environment that is multi-year initiative to define and us significant insights representative of our execute a Diversity and Inclusion and gave us the base to workforce, the markets where (D&I) global strategy and define our aspirations and we operate and the customers framework. Our strategy was strategic priorities. Now » Track progress on inclusive who we serve. developed pursuant to an we have a global D&I work environment by our internal audit of our policies and framework aligned with Promote a culture of inclusion employee engagement practices on diversity and our Sangre Tigo culture. through policies, procedures, survey and Tigo culture inclusion and included focus In the next couple of and regular training, and diagnostic. groups of employees throughout years our goal is to “live” activities that foster employee » Increase employee our company. our aspirations, imple- collaboration. participation in positive menting initiatives that Inclusion We analyzed internal data, work environment allow us to continue build- considered feedback provided by trainings and programs. ing an organization that more than 6000 employees, and Enhance employee wellness welcomes diversity that is also reviewed what companies and growth through policies, inclusive and united. programs and practices that have been successful designed to support their leading these efforts have done. Starting in 2020 we will aspirations professional and amplify the set of D&I personal development. metrics we disclose based on the implemented strategy.

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Responsible Leadership Overview

SDG Our Goals Our targets What we did in 2019 Our performance relevance Continue our Child Online By 2023 reach through our We rolled out the new, regional 4,540 teachersteachers 4, 16 Protection education COP programs: program Conectate Segur@, in 74,959 parents and program to reach more a key step towards broader 70,000 teachers. caregivers children, adolescents, impact and collaboration. parents, teachers and 120,099 children and 4, 16 caregivers. All Latam operations received adolescents reached 200,000 parents and training on Colombia’s Contigo through COP programs 4, 16 caregivers. Conectados program which, in turn, was implemented locally 700,000 children and through volunteer trainers under adolescents. the Conectate Segur@ strategy. 4, 16

Expand Child Online Online training platform live This goal has been revised upon 18,542 volunteering hours 4, 16 Protection training program in all our operations by 2020. further analysis and has been devoted to COP-related for our employee volunteer refocused towards in-person programs, By 2023 reach 120,000 program by creating online training as it was found to be volunteering hours from training platform in all our the most effective methodology COP-related programs. 4, 16 operations. both for attendees and volunteers. Conduct research programs All countries complete Based on Colombia’s 2018 All Latam countries are in each market on the use of research on use of research on use of internet by ready to implement the 4, 16 technology by children and technology by children and children and adolescents, all methodology Protecting Children adolescents to tailor content adolescents by Q4 2020. operations have developed plans standardized during and adapt Child Online to adapt the study for local roll 2019. 4, 16 Protection training based on All countries implement out in 2020 using the same results and insights. action plans based on methodology to have results of the research by comparable results. 2020. Continue our efforts in All operations implement All operations have advanced The system is already in 4, 16 preventing access to online CSAM blocking mechanism the implementation a of new place in 75% of our Child Sexual Abuse by 2020. management system that Latam operations. We Material through our includes enhanced blocking expect to have full networks by continuous measures. This system will coverage in the first half implementation of provide region-wide coverage of 2020. blocking mechanisms, using an international validated region-wide, and list of CSAM sites. advancing industry initiatives.

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Responsible Leadership Overview–continued

SDG Our Goals Our targets What we did in 2019 Our performance relevance Conduct assessments in All operations conduct Through the expansion of the During 2019, we used the 5 Latam markets on assessments focused on Conectadas program, we are results obtained in socio-economic conditions socio-economic conditions identifying benchmarks for the Guatemala to create a and technological and technological development of assessments in regional framework to use capabilities of women and capabilities of women and the coming years that will allow as foundation for the girls who are the girls by 2023. by each operation to research program’s next steps. beneficiaries of our programs the socio-economic conditions to measure benefits and technological capabilities of achieved through trainings. the participants. Continue our programs to Close the digital gap in our GSMA extended the Connected We maintain the same 5 reduce the gender gap in the Latam operations by 2020 in Women initiative until 2023, objectives, with each use of mobile technology. line with the acquired Millicom as the only operator in operation’s local goals commitments through Latam to have signed to depending on their GSMA’s Connected Women commitment agreed to the specific baselines. Empowering Women Empowering initiative. extension in November 2019. Implement regional strategy 400,000 women trained We rolled out the CONECTADAS Design and planning for 5 to advance digital literacy through our digital inclusion program in all operations based regional Conectadas app with educational programs program by 2023. on Guatemala´s strategy with is underway for delivery on basic and advanced the Sheva Foundation. during 2020. digital knowledge and entrepreneurial skills.

Design and roll out to We deployed a pilot program Initial pilot program in 9 operations a regional in Paraguay to create a standard Paraguay in final stages. Measure impacts of impact measurement impact measurement tool. The The resulting connectivity in methodology by 2020. results from this assessment will methodology will be communities targeted by serve as benchmark for expanded to all other our programs to assess adaptation and replication in Latam countries in 2020. improvements in socio- other operations. economic conditions of All countries implement an Pending results from Paraguay beneficiaries, and optimize 9 program content and impact measurement assessments, all ops will resource allocation. methodology related to implement accordingly. connectivity and digital inclusion by 2022.

Provide internet to 1300 Operations have ongoing 1,416 schools and public 9 schools and public programs that include provision institutions to date institutions by 2023 of internet access to public provided with internet reaching our set institutions and schools, keeping connection. We have commitment with the OAS us on track with OAS 2030 goal. already exceeded our Continue bringing internet ICT Alliance. 2023 goal and are well on Connecting Communities connections to schools and track to meeting the public institutions in 2030 commitments. vulnerable communities throughout Latin America Provide with digital We continued the Further review of target is through collaborative platforms and implementation of programs needed to adjust to new partnerships with local empowerment programs with focus on robotics and programs and government and NGOs. through the use of empowerment through development of strategy. technology to 1,000 technology. Further opportunities in public institutions and combining with community development Protecting Children institutions by 2023. actions to increase scope and effectiveness.

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Our Performance

1. Human Rights

KPI 2017 2018 2019 Total number of law enforcement requests1 41,323 45,666 40,1322 Number of major events 14 20 10 Law enforcement requests—LatAm Interception 971 2,116 2,121 Customer metadata 32,340 33,868 37,497 MFS 181 523 514 Content Takedown 1 0 0

1 We classify law enforcement requests into three categories: interception, customer metadata, and customer financial data (related to the mobile money services or MFS services we provide). These three categories encompass the vast majority of requests we receive. We report all other requests outside of the definitions as major events. 2 2019 values only for Latam; see LED report for additional details.

Overview of Major Events by Type1 KPI 2017 2018 2019 Shutdown or restriction of services 2 7 8 Proposals for significant changes in local laws 4 5 1 Proposals for significant changes in technical or operational procedures 1 2 1 Disproportionate interception or customer data requests 2 2 0 Politically motivated messages 0 1 0 Other 5 3 0

1 Data reported for calendar year

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Our Performance–continued

2. Ethics1

KPI 2017 2018 2019 % of employees who acknowledged the Code of Conduct 96 91 96 % of employees who have completed the Code of Conduct training 962 90 94 % of procurement staff trained on Anti-Corruption3 96 97 94 % of senior managers trained on Anti-Corruption 98 99 93 % of employees who filled and signed the conflict of interest declaration form 90 92 94 Number of cases of unethical behavior reported and investigated 164 336 4964 Investigations resulting in written warning 6 72 6 Investigations resulting in termination of employee contract 58 31 35 % revenue from MFS represented by operations audited for AML controls 27 97 95 % of operations (where) we conducted a compliance risk assessment or audit 45 30 90 Turnover of procurement staff (%) 17 28 13

1 Ethics metrics are reported on calendar year basis, with the exception of “Turnover of procurement staff” . 1 The percentages of employees who acknowledged the Code of Conduct and who have completed the Code of Conduct training are the same as both were done simultaneously for 2017. 3 Formerly ABAC. 4 Incidents reported through Millicom Ethics Line and Linea Etica TigoUne. Incidents reported from Guatemala were channeled through Millicom Ethics Line as of 2018.

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Our Performance–continued

2. Ethics1

KPI 2017 2018 2019 Overview of cases reported to Millicom Ethics Line5 Bribery and corruption Number of cases reported and investigated 7 10 12 Cases ending in written warning 0 2 0 Cases resulting in termination 0 3 1 Discrimination and harassment Number of cases reported and investigated 12 49 66 Cases ending in written warning 0 16 3 Cases resulting in termination 0 10 5 Human rights and labor Number of cases reported and investigated 22 0 93 Cases ending in written warning 2 0 2 Cases resulting in termination 0 0 9 Conflict of interest Number of cases reported and investigated 7 24 29 Cases ending in written warning 0 4 0 Cases resulting in termination 0 3 1 Fraud Number of cases reported and investigated 10 16 37 Cases ending in written warning 0 3 0 Cases resulting in termination 3 2 8 Other Number of cases reported and investigated 22 89 91 Cases ending in written warning 4 21 1 Cases resulting in termination 1 4 7

5 The metric “Cases resulting in written warning or termination” reports number of cases with that outcome; not number of written warning and/or terminations. One case can include warnings and/or terminations to multiple employees.

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Our Performance–continued

3. Environment e-waste recycled through responsible waste management program (tonnes)

KPI 2017 2018 2019 Bolivia 474 7.74 5,586 Colombia 77 587 431 Costa Rica 44.50 310 118.14 El Salvador 162 147 123 Guatemala 1,037 400 1,303 Honduras 3.52 0 9.81 Paraguay 236 105.18 0.20 Panama Not included Not included 138.10

Tanzania 462 400 8,800

Energy use

Total Energy Consumption / Sources of energy by asset type Base station and fixed network sites Fuel (000 l) 14,732 10,4631 4,247 Energy from fuel (MWh) 147,073 104,4562 42,685 Electricity (MWh) 354,949 450,1313 441,336 Our fleet Fuel (000 l) 6,335 4,064 3,257 Energy from fuel (MWh) 60,756 38,609 31,230 Electricity (MWh) N/A N/A N/A Datacenters and offices4 Fuel (000 l) 988 450 293 Energy from fuel (MWh) 24,082 4,490 2,926 Electricity (MWh) 55,885 89,6885 74,598 Shops Fuel (000 l) 332 23.44 71.8 Energy from fuel (MWh) 3,312 234 717 Electricity (MWh) 15,509 16,8116 11,618

1 Data from 2018 was restated from originally published value of 10,435.35K litres to reflect adjustments made after publication of past Annual Report. 2 Data from 2018 was restated from originally published value of 104,178.29 MWh to reflect adjustments made after publication of past Annual Report. 3 Data from 2018 was restated from originally published value of 444,885.99 MWh to reflect adjustments made after publication of past Annual Report. 4 Many of our datacenters are co-located with our offices. Therefore, they often do not have separate meters to enable us to report on datacenter consumption separately. 5 Data from 2018 was restated from originally published value of 89,582.09 MWh to reflect adjustments made after publication of past Annual Report. 6 Data from 2018 was restated from originally published value of 16,916.97 MWh to reflect adjustments made after publication of past Annual Report.

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3. Environment

KPI 2017 2018 2019 Electricity (MWh) 416,343 553,330 527,553 Fuel (000 l) 22,387 14,922 7,869 Energy from fuel (MWh) 235,223 147,789 77,557 Total Energy Consumption (MWh) 711,566 701,119 605,111 Emissions and e-waste overview

Total weight of e-waste recycled through our responsible e-waste 2,496.02 1,956.92 16,509 management program

1 2 Scope 1 emissions (Tonnes of CO2e) 58,787 39,045 20,553

3 4 Scope 2 emissions (Tonnes of CO2e) 114,883 140,605 137,754

5 Scope 3 emissions (Tonnes of CO2e) N/A N/A 3,994 % of operations set up on global responsible e-waste 91 91 100 recycling program

Tonnes of CO2e emissions per USD1,000 revenue 0.029 0.03 0.026

1 Emissions from fuel are calculated using World Resources Institute (2015) GHG Protocol tool for stationary combustion, version 4.1. 2 Data from 2018 was restated from originally published value of 39,181 tCO2e to reflect adjustments made after publication of past Annual Report. 3 Emissions from electricity are calculated using Electricity Emission Factors from IEA, version 2016, except in the case of Paraguay and, in 2017 and 2018, Chad, where other official sources were used. 4 Data from 2018 was restated from originally published value of 141,439 tCO2e to reflect adjustments made after publication of past Annual Report. 5 We only consider air travel for Scope 3 emissions in 2019. As we standardize and build up our scope 3 calculation and reporting capabilities, we will expand this scope accordingly.

4. Diversity & Inclusion

KPI 2017 2018 2019 % of women in senior management positions1 33 28 36

% of women across our employee base 40 41 37

1 This metric is reported on a calendar year basis.

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Our Performance–continued

5. Supply Chain

KPI 2017 2018 2019 % of strategic suppliers1 who signed the supplier code 89 89 90 % of all suppliers who have signed the supplier code 61 65 68 % of spend represented by suppliers who completed assessments on EcoVadis to date 47 42 59 % of procurement teams trained on responsible supply chain management 96 81 88 Number of suppliers trained on Millicom’s CR strategy and requirements 121 108 117

1 A supplier is considered strategic if they follow one or more of the following: significant spend, multi-year relationship in place or expected, products and services in a strategic spend category, direct impact on delivery capability, potential impact on brand and reputation and difficulty of switching to alternative suppliers.

6. Protecting Children

KPI 2017 2018 2019 % of operations with child risk impact assessments conducted to date 57 100 871 New KPI for New KPI for Volunteering hours from COP-related programs 2019 2019 18,542 Number of children reached by COP training (’000)2 188.60 360.10 480.20 % of operations in LatAm blocking child sexual abuse content 71 71 75

1 The percentage decreased as the 2019 Latam base includes Panama, which has this assessment pending. 2 Cumulative from 2016. From October 1, 2018 to September 30, 2019, the number of children reached by COP training was 120,099 in Latam.

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Our Performance–continued

7. Connecting Women

KPI 2017 2018 2019 Women enrolled in digital inclusion programs New KPI for 2018 117,340 207,0191 Women enrolled in financial inclusion programs New KPI for 2018 97,978 See above

1 As of 2019, we will report one unified metric, as our digital inclusion programs often, but not always, include financial inclusion programs but when we run financial inclusion programs they are always framed from a digital inclusion perspective. The 2018 values partially overlap and therefore should not be combined.

8. Connecting Communities

KPI 2017 2018 2019 Monetary value of employee volunteering 170,000 235,000 405,503 Total cash contributions (’000) 3,203 3,776 2,686 In-kind giving (at cost; ’000) 6,399 6,737 6,139 Schools and public institutions connected to the Internet 1,259 1,361 1,416 Number of volunteering hours 14,841 24,732 51,4251

1 Total volunteering hours. For 2019, this includes the 18,442 hours from COP-related programs as reported on page 62.

9. Health and Safety

KPI1 2017 2018 2019 % of operations certified against ISO 45001 New KPI for 2019 New KPI for 2019 100 Number of employee fatalities 1 0 02 Number of contractor fatalities 9 2 6 Number of H&S incidents reported 387 369 460 Lost-time injury rate per 1000 workers 2.60 0.54 1.773 Absentee rate4 0.80 1.29 1.34

1 Employee and contractor fatalities aligned with reporting period from October 1st 2018 to September 30th, 2019. Previous year fatalities reported under the same reporting period. 2 Unfortunately an employee fatality occurred in Q4 2019. It is reported in our Q4 earnings release and will be included in our 2020 Annual Report. 3 The increase in this rate is due to the addition of Panama to the scope. In this country, the legal incident classification considers a broader definition of the incidents that require time off. 4 The absentee rate is the number of unplanned absences versus the average number of workdays in in the reporting period, expressed as a percentage.

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Independent Assurance Statement to Millicom International Cellular S.A

ERM Certification and Verification Services (ERM CVS) was engaged by Millicom International Cellular S.A (further ‘Millicom’) to provide limited assurance in relation to specified information in the section ‘Corporate Responsibility Performance Tables’ pages 57-63 within Millicom’s 2019 Integrated Annual Report and on Millicom’s website as set out below.

Engagement summary Whether the following 2019 disclosures are fairly presented in all material respects, with the reporting criteria: Materiality and stakeholder engagement disclosures found at https://millicom.com/2019annualreport/ourcrreporting.html Human Rights • Number of law enforcement requests (Group) • Number of major events Ethics • % of employees who acknowledged the Code of Conduct • % of employees who have completed the Code learning • % of procurement staff trained on Anti-Bribery and Anti-Corruption [ABAC] • % of employees who have filled and signed the conflict of interest declaration form • Number of cases of unethical behavior reported and investigated • Turnover of procurement staff [%] Inclusion Scope of our • % of women in senior management positions assurance engagement Environment • Total electricity consumption [MWh] • Total fuel consumption [liters] • Total energy consumption [MWh] • Scope 1 emissions [metric tonnes CO2e] • Scope 2 emissions [metric tonnes CO2e] Supply Chain • % of strategic suppliers who have signed the Supplier Code • % of all suppliers who have signed the Supplier Code • % of procurement teams trained on responsible supply chain management Taking Care of Our People • Number of H&S incidents reported • Number of employee fatalities • Number of contractor fatalities • Lost-time injury rate per 1,000 workers • Absentee rate Reporting Millicom’s Reporting Guidelines, as specified in footnotes on Performance Tables. criteria Assurance ERM CVS’ assurance methodology, based on the International Standard on Assurance Engagements ISAE standard 3000 (Revised). Assurance level Limited assurance. Millicom is responsible for preparing the data and for its correct presentation in reporting to third parties, Respective including disclosure of the reporting criteria and boundary. responsibilities ERM CVS’s responsibility is to provide conclusions on the agreed scope based on the assurance activities performed and exercising our professional judgement.

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Our conclusions Based on our activities, nothing has come to our attention to indicate that Millicom’s 2019 disclosures, as listed above, are not fairly presented, in all material respects, with the reporting criteria.

Our assurance activities Our objective was to assess whether the selected data are reported in accordance with the principles of completeness, comparability (across the organisation) and accuracy (including calculations, use of appropriate conversion factors and consolidation). We planned and performed our work to obtain all the information and explanations that we believe were necessary to provide a basis for our assurance conclusions. A multi-disciplinary team of EHS and assurance specialists performed the following activities: • Interviews with relevant staff to understand and evaluate the data management systems and processes (including IT systems and internal review processes) used for collecting and reporting the selected data;

• A review of the internal indicator definitions and conversion factors;

• A review of the inputs of the 2018 Materiality Assessment and stakeholder engagement activities in relation to disclosures on the ongoing Five-Year CR plan;

• Visits to two markets (Colombia and Guatemala) to review local reporting processes and consistency of reported annual data with selected underlying source data for each indicator. We interviewed relevant staff, reviewed site data capture and reporting methods, checked calculations and assessed the local internal quality and assurance processes;

• An analytical review of the data from all sites and a check on the completeness and accuracy of the corporate data consolidation;

• Year-end assurance activities at corporate level including the results of internal review procedures and the accuracy of the consolidation of the data for the selected indicators from the site data;

• A review of samples of documentary evidence, including internal and external documents, to support key assertions related to assured indicators; and,

• Reviewing the presentation of information relevant to the scope of our work in the Report to ensure consistency with our findings.

The limitations of our engagement The reliability of the assured data is subject to inherent uncertainties, given the available methods for determining, calculating or estimating the underlying information. It is important to understand our assurance conclusions in this context. We have not reviewed any of the data for years prior to 2019.

Jennifer Iansen-Rogers Head of Corporate Assurance 28 Feb 2020 ERM Certification and Verification Services, London www.ermcvs.com; email: [email protected] ERM CVS is a member of the ERM Group. The work that ERM CVS conducts for clients is solely related to independent assurance activities and auditor training. Our processes are designed and implemented to ensure that the work we undertake with clients is free from bias and conflict of interest. ERM CVS and the ERM staff that have undertaken this engagement work have provided no consultancy related services to Millicom in any respect

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GOVERNANCE: Governance and Business Ethics

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Growing our connections and impact.

Chairman’s Report Millicom’s Board of Directors (“the Board”) and its committees dealt with many significant strategic, operational and compliance matters in 2019. These included: • Enhancing and adapting our governance structures, and strengthening our controls and processes in connection with the listing of Millicom’s shares on the Nasdaq Stock Market in the U.S. • Acquiring and integrating mobile businesses in Central America • Overseeing capital allocation and our strategic focus on mobile and cable businesses in Latin America

Role of the Board • Mr. Anders Jensen, who served the Board and its The Board is responsible for approving Millicom’s strategy, Compensation Committee from May 2017 to January 2019 financial objectives, and operating plans, as well as for • Mr. Roger Solé Rafols, who served the Board from May 2017 to May 2019. overseeing risk and governance. The Board also plans for CEO succession and reviews plans for other senior management Strength through Diversity, Teamwork and Sharing positions. The diverse people in our operating countries, offices, and Board Changes headquarters comprise a key strength for Millicom. We value different perspectives, encourage the sharing of alternate In January we welcomed Ms. Pernille Erenbjerg and Mr. James viewpoints, and promote equal opportunity. These remain Thompson to the Board. Both are also members of the Audit core elements that contribute of Millicom’s corporate culture. Committee. Ms. Erenbjerg, who is Deputy Chairman of the Board, brings years of experience from operating a converged provider We are proud of our success in fostering strong workplace of communication and entertainment services, as well as from environments and the accolades received in this respect. driving transformational processes in complex organizations, Compliance and Business Ethics both organically and through M&A. Mr. Thompson brings During 2019, we continued building and refining our extensive investment management experience to the Board and compliance program and culture with support from our will contribute significantly to discussions on Millicom’s long-term Executive Team and Ethics and Compliance team. strategy and capital allocation. On behalf of the Board, I would like to reaffirm our In May 2019 we welcomed Ms. Mercedes Johnson to the commitment to a culture of doing the right things in the right Board. Ms. Johnson brings significant experience gained at way, encompassed by “Sangre Tigo”, which builds our strength technology-oriented multinational U.S. listed companies in and success. We are proud to be a leader on ethics and various capacities including Board and Committee roles and compliance in our markets. We look forward to engaging with as a Chief Financial Officer. you and thank you for being part of the Millicom journey. I would like to thank the Board members who stepped down during 2019: José Antonio Ríos García • Mr. Tom Boardman, who served as Chairman from May Chairman of the Board of Directors 2016 until January 2019, for his significant contributions to the Board and its Committees over this time

Millicom 2019 Annual Report 67 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Corporate Governance Framework

Background on June 16, 1992, and registered with Millicom’s shares are listed on Nasdaq Millicom International Cellular S.A. the Luxembourg Trade and Companies’ Stockholm, in the form of Swedish (“Millicom” or the “Company”) is a public Register (Registre du Commerce et des Depository Receipts and on the Nasdaq limited liability company (société Sociétés de Luxembourg) under number Stock Market in the U.S. since January 9, anonyme) governed by the Luxembourg B 40 630. The Millicom Group comprises 2019, where Millicom is registered as a law of August 10, 1915 on Commercial Millicom and its subsidiaries, joint foreign private issuer. Companies (as amended), incorporated ventures and associates.

Millicom’s Corporate Governance Framework is primarily based on the following legislation, principles and regulations:

Publication Authority Philosophy Swedish Code of Corporate Governance Guiding Principles Comply or Explain Luxembourg Law Legislation Comply EU Directives and Regulations Legislation Comply Nasdaq Stockholm Issuer Rule Book Regulation Comply Nasdaq Stock Market Rules Regulation Comply U.S. Securities Laws Regulation Comply Good Stock Market Practice Guiding Principles Corporate Citizenship

Millicom governance deviated in 2019 in relation to the Swedish Code in the following areas:

Code requirement Millicom practice Explanation 1.5–A shareholder, or a proxy representative Minutes are signed by the chairman of While this represents a deviation from of a shareholder, who is neither a member the shareholders’ meeting (who is not a the Swedish Code, Millicom follows of the board nor an employee of the member of the Board or an employee Luxembourg Law in connection with company is to be appointed to verify and of the Company), the meeting procedures and rules for its sign the minutes of the shareholders’ Secretary and an appointed Scrutineer. shareholders’ meetings. meeting. 9.7–Vesting of share-related incentive Deferred share incentive plans contain The Company believes that this vesting programs to be no less than three years. vesting of 16.5–30% of granted schedule ensures alignment between shares after one year, 16.5–30% after the interests of the Company’s two years, and 40–67% after three shareholders and its employees. years.

Within these frameworks, the Board governance. The Code complements Compliance with Applicable Stock develops and continuously evaluates laws and regulations and sets its good Exchange Rules internal guidelines and procedures, as practice level above regulatory Neither the Nasdaq Stockholm’s further described below, to ensure the requirements. The Swedish Corporate disciplinary committee nor the Swedish quality and transparency of Millicom’s Governance Board states that self- Securities Council reported any corporate governance practices. regulation is often preferable to infringement of applicable stock mandatory legislation and therefore exchange rules or breach of good Swedish Corporate Governance Code allows companies to deviate from its practice on the securities market by The Swedish Corporate Governance rules, following a “comply or explain” Millicom in 2019. Code (the “Swedish Code”) promotes philosophy. positive development of corporate

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Corporate Governance Structure Millicom’s Corporate Governance structure comprises the following three levels:

1. Shareholders and representatives Shareholders’ meeting Nomination Committee of shareholders.

2. Board of Directors and Committees Board of Directors appointed by the Board from among its members.

Compliance and Business Compensation Committee Audit Committee Conduct Committee

3. CEO and Executive management, Chief Executive Officer Internal Audit and its main functions managing governance, risk, compliance and ethics (including security), corporate responsibility, controls.

Executive Management Team

Compliance and Legal and Corporate Business Control Risk Management Business Ethics Governance Responsibility

1. Shareholders and shareholders’ under Luxembourg law, an • Approval of guidelines for the meeting extraordinary general meeting (“EGM”) remuneration of senior The shareholders’ meeting is Millicom’s must be convened to amend the management highest decision-making body and a Articles of Association. • Approval of a Share Repurchase Plan forum for shareholders to exercise At the 2019 AGM, held on May 2, 2019, influence. Each shareholder has the shareholders decided the following key At the EGM, held on January 7, 2019, right to participate in the shareholders’ items: shareholders decided the following key meeting and to vote according to the items: number of shares owned. Shareholders • Approval of the 2018 Consolidated unable to attend in person may exercise Financial Statements and the • Resignation and election of two their rights by proxy/vote in writing. distribution of a dividend of $2.64 directors per share Millicom’s articles of association • Amendment of the Articles of (consolidated as at amended on • Election and re-election of the Association regarding the procedure January 7, 2019) (the “Articles of Directors until the date of the 2020 for nomination of directors Association”) set the Annual General AGM Meeting of Shareholders (“AGM”) to be • Reappointment of Ernst & Young held in Luxembourg within six months (“EY”) as the external auditor of the close of the financial year. • Approval of remuneration to the Millicom’s Articles of Association are Board and auditor and procedures available in the governance section of for the Nomination Committee our website at www.millicom.com/ our-company/governance/governance- reports/. Unless otherwise required

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Nomination Committee Member On behalf of: Position Mr. John Hernander Nordea Investment Funds Chairman Mr. Dan Sievers Fiduciary Management Ltd Member Mr. Peter Guve AMF Pensionsförsäkring AB Member Ms. Juanjuan Niska Wellington Management Member

The Nomination Committee is Corporate Governance shall be applied Under the terms of the Nomination appointed by the major shareholders of for the election of Directors to the Committee charter, the committee Millicom and is not a Board committee. Board of Directors of the Company, as consists of at least three members, with Its role is to propose decisions to the long as such compliance does not a majority representing the larger shareholders’ meeting in a manner that conflict with applicable mandatory law, shareholders of the Company. The promotes all shareholders’ common or regulation or the mandatory rules of current Nomination Committee was interests. Nomination Committee any stock exchange on which the formed in October 2019, in consultation members’ term of office typically begins Company’s shares are listed. with larger shareholders of the Company at the time of the announcement of the at May 31, 2019 and in accordance with Nomination Committee proposals to interim report covering the period the resolution of the 2019 AGM. the AGM include: January to September of each year and The table below sets out beneficial ends when a new Nomination • Election and remuneration of ownership of Millicom common shares, Committee is formed. Directors of the Board, and par value $1.50 each, by each person Chairman of the Board At the January 7, 2019 EGM, who beneficially owns more than 5% shareholders resolved that the Articles • Appointment and remuneration of of Millicom common stock at of Association be amended to stipulate the external auditor December 31, 2019. that the Nomination Committee rules • Proposal of the Chairman of the and procedures of the Swedish Code of AGM

Number of % Shareholder shares Shareholding Dodge & Cox 9,380,493 9.2 Swedbank Robur Fonder AB 5,276,526 5.2

Footnote: Except as otherwise indicated, the holders listed above (“holders”) have sole voting and investment power with respect to all shares beneficially owned by them. The holders have the same voting rights as all other holders of Millicom common stock. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares as of a given date which such person or group of persons has the right to acquire within 60 days after such date. For purposes of computing the percentage of outstanding shares held by the holders on a given date, any security which such holder has the right to acquire within 60 days after such date (including shares which may be acquired upon exercise of vested portions of share options) is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

Promoting Board Diversity Board composition. This determination In its work, the Nomination Committee Millicom’s Nomination Committee will include knowledge, experience, and applies rule 4.1 of the Swedish recognizes the importance of diversity skills in areas that are critical to Corporate Governance Code as its for promoting strong corporate understanding the Company and its diversity policy. governance, competitive advantage, business; richness of views brought by and effective decision-making. The different personal attributes such as Nomination Committee is responsible gender, race, age, and nationality; and for periodically determining the other personal characteristics, such as appropriate skills, perspectives, integrity and judgment; and experiences, and characteristics candidates’ commitment to the boards required of Board candidate based on of other publicly held companies. the Company’s needs and the current

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2. Board of Directors and Board committees Independence of the Board The Chairman convenes the Board and Chairman, Deputy Chairman and leads its work. The Chairman is Board of Directors accountable to the Board and acts as a six members direct liaison between the Board and the management of the Company, through the CEO. Meeting agendas are 100% set with the CEO, and the Chairman Non-Executive Directors José Antonio Ríos García Pernille Erenbjerg communicates Board decisions where Odilon Almeida appropriate. Janet Davidson Tomas Eliasson Role of the Board Mercedes Johnson Independent from the Company and its Lars-Åke Norling* The Board is responsible for approving Executive Management James Thompson Millicom’s strategy, financial objectives, and operating plans, and for oversight of governance. The Board also plans for succession of the CEO and reviews other * From September 2019 Mr. Norling is no longer an employee of Kinnevik AB, and in November 2019 senior management positions. Kinnevik AB distributed its 37.2% shareholding in Millicom to its own shareholders.

As set forth in the Company’s Articles Powers and Limitations of the Board on terms no less favorable to the of Association, the Board must be Borrowing powers—The Board has Company than could have been composed of at least six members. The unrestricted borrowing powers on behalf obtained from an unrelated third 2019 AGM set the number of Directors of, and for the benefit of Millicom. party and, in the case of a Director, at eight, comprising a Chairman, a he or she shall abstain from Time and age limit—No age limit Deputy Chairman and six members deliberating and voting on any exists for being a Director of Millicom. (none of whom are Executive Directors). matters that pertain to such contract Directors can be elected for a maximum or transaction at any meeting of the The Board selects the CEO, who is period of six years before either being Board. charged with the daily management of re-elected or ending their service. the Company and its business. The CEO Directors are typically elected annually. • Any such personal interest shall be is responsible for recruiting the senior There are no restrictions on the fully disclosed to the Company by management of the Company. The maximum continuous period that a the relevant Director, officer or Board reviews plans for key senior Director can serve. Directors hold office employee. management positions, supervises, until a successor is elected. supports and empowers the senior If any Director or officer of the management team, and monitors Restrictions on voting—No contract or Company should have any personal senior managers’ performance. In other transaction between the interest in any transaction of the accordance with the Swedish Code, the Company and any other person shall be Company, the Director shall make division of work between the Board and affected or invalidated by the fact that known to the Board such personal the CEO is set out in “The Rules of any Director, officer or employee of the interest and shall not consider or vote Procedure, Instructions to the CEO, and Company has a personal interest in, or on any such transaction. The Reporting Instructions”. is a director, officer, or employee of such transaction and the Director’s or other person. However, the following officer’s interest therein shall be Further details on the roles and conditions apply: reported at the next general meeting of activities of the various committees, as shareholders. well as their responsibilities and • The contract or transaction shall be activities, appear later in this section. negotiated on an arm’s-length basis

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Share Ownership Requirements Chief Executive Officer • is employed, or has been employed, Directors are not required to be by the Company or a closely related Together with the management team, shareholders of the Company. Share company, within the last three years the CEO leads the development and ownership of Directors is included in the execution of the Company’s strategy • receives a not insignificant Director biographies set out on the with a view to creating shareholder remuneration for advice or other following pages. value. The CEO is responsible for services beyond the remit of the Roles day-to-day activities and management Board position from the Company, a Chairman of the Board decisions, both operating and closely related company or a person financial. The CEO is a liaison between in the executive management of The Chairman is elected by the AGM. If the Board and management and the Company the Chairman relinquishes the position communicates to the Board on behalf • has, or has within the last year, had a during the mandate period, the Board of management. significant business relationship or elects a new Chairman from among its other significant financial dealings members to serve until the end of the The CEO also leads Millicom’s with the Company or a closely next AGM. communications with shareholders, related company as a client, supplier employees, government authorities, Deputy Chairman of the Board or partner, either individually or as a other stakeholders, and the public. member of the executive If elected by the Board, the Deputy Board Membership, Balance and management team, a member of Chairman acts as a sounding board and Independence the Board or a major shareholder in provides support for the Chairman. The The Nomination Committee and the a company with such a business Deputy Chairman convenes Board Board periodically review the size and relationship with the Company meetings in accordance with the balance of the Board to determine Company’s Articles of Association, and • is or has within the last three years whether any changes are appropriate. leads its work in the event the Chairman been a partner at, or has, as an is unavailable or is excused from a At the AGM, held annually within six employee, participated in an audit Board meeting. The Deputy Chairman months of the end of the financial year, of the Company conducted by, the may act as an intermediary in any or at any other general meeting, Company’s or a closely related conflicts among Board members or shareholders may vote for or against company’s current or then auditor between the Chairman and the CEO. the Directors proposed by the • is a member of the executive The Board can designate additional Nomination Committee or may elect management of another company roles and responsibilities of the Deputy different Directors. if a member of the board of that Chairman. company is a member of the The Board has adopted the qualification executive management of Corporate Secretary guidelines of an “independent director” the Company as defined by the Swedish Code, and The Corporate Secretary is appointed with consideration of the specific • has a close family relationship with a by the Board to ensure that Board independence requirements within the person in the executive members have the proper advice and Nasdaq Stock Market rules. A director’s management or with another resources for performing their duties. independence is determined by a person named in the points above, if The Corporate Secretary is also general assessment of all factors that that person’s direct or indirect responsible for organizing and may give cause to question the individual business with the Company is of coordinating Board and Committee Director’s independence of the Company such magnitude or significance as to meetings and ensuring that the minutes or its Executive Management. justify the opinion that the Board of those meetings reflect the proper member is not to be regarded as exercise of Board duties. Such factors include whether the independent. individual: The Corporate Secretary is also a confidante and resource to the Board • is the CEO, or has been the CEO, of and senior management, providing the Company or a closely related advice and counsel on Board company within the past five years responsibilities and logistics.

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In accordance with the Swedish Code: emale • The majority of Millicom’s Board must be independent from the Company and its executive management team (all Millicom Directors meet this criterion) ener o te • At least two of those independent Directors must also be oar independent from the Company’s major shareholders (all of Millicom’s Directors meet this criterion) Male • Not more than one member of the Board may be part of 2 the executive management team of the Company or any of its subsidiaries (no Millicom Board members are part of the executive management team). • The majority of the members of the Audit Committee are to be independent in relation to the Company and its executive management. At least one of the members who is independent in relation to the Company and its executive management is also to be independent in 1t ear relation to the Company’s major shareholders.

• The Chairman of the board may chair the Compensation t ear Committee. The other members of the committee are to 1 be independent of the Company and its executive management. enure o irector In addition, in accordance with Nasdaq Stock Market rules: 2n ear t ear • The Audit Committee must have at least three members, 1 1 all of whom meet the Nasdaq Stock Market and the U.S. t ear Securities and Exchange Commission definitions of r ear independence. 1 1

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Millicom 2019 Annual Report 73 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Board Profile: Skills and Experience

Mr. José Antonio Ríos García Ms. Pernille Erenbjerg Mr. Odilon Almeida (Venezuelan and American) (Danish) (Brazilian) Chairman, Non-Executive Director Deputy Chairman, Non-Executive Director Non-Executive Director (FIRST APPOINTED: MAY 2017) (FIRST APPOINTED: JANUARY 2019) (FIRST APPOINTED: MAY 2015)

Mr. José Antonio Ríos García was Ms. Pernille Erenbjerg was re-elected as Mr. Odilon Almeida was re-elected to re-elected as Chairman of the Board in Deputy Chairman of the Board in May the Board in May 2019. He is a member May 2019. 2019. She is Chairman of the of the Compliance and Business Compensation Committee, and a Conduct Committee. Mr. Ríos (1945), a U.S. citizen, is member of the Audit Committee. Chairman and CEO of Celistics Mr. Almeida (1961), a citizen of Brazil, was Holdings, a leading provider of Ms. Erenbjerg (1967), a Danish citizen, recently appointed as President and Chief Executive Officer, of ACI Worldwide Inc, distribution and intelligent logistics until December 2018 served as effective March 9, 2020 and will also be solutions for the consumer technology President and Group Chief Executive appointed the Board of ACI. Mr. Almeida industry in Latin America. Prior to Officer of TDC, the leading provider of joins ACI having most recently served as an joining Celistics in 2012, he was the integrated communications and Operating Partner at Advent International, International President of Global entertainment solutions in Denmark supporting business development at the Crossing, the telecommunications and Norway. Previously, she served as fund’s portfolio companies. Previously company later acquired by Level 3 TDC’s Chief Financial Officer and as Mr. Almeida served as President of Western Communications. Executive Vice President of Corporate Union Global Money Transfer, where he led Finance. Ms. Erenbjerg also serves on Between 1999 and 2001, Mr. Ríos Western Union’s global consumer omni- the Boards of Nordea, the largest served on the Global Management channel business across more than 200 financial services group in the Nordic countries and territories. His global business Committee of Telefónica and as region, and Genmab, a Danish leadership and board experience at President and CEO of Telefónica Media. international biotechnology company. Western Union, Millicom, BankBoston (now Prior to joining Telefónica he served as She holds an MSc in Business Economics Bank of America), The Coca-Cola Company Vice President of Hughes Electronics and Auditing from Copenhagen and Colgate-Palmolive give him deep Corporation, was the founding Business School. knowledge of corporate governance, President and CEO of Galaxy Latin general management, technology America (DirecTV Latin America), and Ms. Erenbjerg brings years of experience platforms, regulatory and compliance served as Chief Operating Officer and from operating a converged provider of issues and consumer insights in developed Corporate Vice President at the Cisneros communication and entertainment and emerging nations. Group of Companies for 14 years. services as well as from driving Mr. Almeida holds a Bachelor of Civil transformational processes in complex Mr. Ríos brings to the Millicom Board his Engineering from the Maua Engineering organizations, both organically and significant experience in leading a School in São Paulo, Brazil, a Bachelor of through M&A. variety of consumer technology Business Administration from the University businesses in Latin America, including INDEPENDENT from the Company, its of São Paulo, and an MBA with specialization those in the telecommunications and Executive Management, and its major in Marketing from the Getulio Vargas electronics industries. shareholders. Foundation in São Paulo. He further advanced his education at IMD Lausanne, The Wharton INDEPENDENT from the Company, its MILLICOM SHAREHOLDING AT School, and Harvard Business School. Executive Management, and its major 3,320 shares. JANUARY 31, 2020: Mr. Almeida strengthens the Millicom shareholders. Board with decades of experience in the MILLICOM SHAREHOLDING AT financial services and fintech sectors, and a JANUARY 31, 2020: 5,814 shares. leadership style anchored in growth acceleration and business turnarounds involving retail and digital transformation, organic growth and successful M&A. INDEPENDENT from the Company, its Executive Management, and its major shareholders. MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 5,086 shares.

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Board Profile: Skills and Experience–continued

Ms. Janet Davidson Mr. Tomas Eliasson Mr. Lars-Åke Norling (American) (Swedish) (Swedish) Non-Executive Director Non-Executive Director Non-Executive Director (FIRST APPOINTED: MAY 2016) (FIRST APPOINTED: MAY 2014) (FIRST APPOINTED: MAY 2018)

Ms. Janet Davidson was re-elected to Mr. Tomas Eliasson was re-elected to Mr. Lars-Åke Norling was re-elected to the Board in May 2019. She is the the Board in May 2019. He is the the Board in May 2019 . He is a member Chairman of the Compliance and Chairman of the Audit Committee. of the Compensation Committee and a Business Conduct Committee. member of the Compliance and Mr. Eliasson (1962), a Swedish Business Conduct Committee. Ms. Davidson (1956), a U.S. citizen, is a citizen, is Executive Vice President Supervisory Board member of and Chief Financial Officer at Mr. Norling (1968), a Swedish citizen, STMicroelectronics and a Director at Sandvik. became CEO of Nordnet in September AES Corporation. She held various 2019 and previously served as an Previously Mr. Eliasson served as managerial positions in Alcatel Lucent Investment Director and Sector Head of Chief Financial Officer and Senior from 1979 to 2011, including Chief TMT at Kinnevik. Prior to that, Vice- President at Electrolux, a Strategy Officer, Chief Compliance Mr. Norling was CEO of Total Access Swedish appliances manufacturer. Officer, and Executive Vice President of Communications (dtac) in Thailand Mr. Eliasson has also held various Quality & Customer Care. where he executed a digital management positions in Sweden transformation and led a turnaround of Ms. Davidson was appointed to the Board and abroad, including at ABB Group, the company’s financial performance. of AES Corporation in February 2019 and Seco Tools AB and Assa Abloy AB. He also served as EVP of Developed serves on its Financial Audit Committee, He holds a Bachelor of Science in Asia at Telenor, CEO of Compensation Committee, and Business Administration and DigiTelecommunications Malaysia and Innovation and Technology Committee. Economics from the University of CEO of Telenor Sweden. She has served on the Supervisory Board Uppsala. of STMicroelectronics since June 2013 Mr. Norling holds an MBA from and is a member of its Audit Committee Mr. Eliasson brings to the Millicom Gothenburg School of Economics, an and Strategy Committee. Working Board his significant experience as a MSc in Engineering Physics from Woman Foundation presented Ms. CFO for multinational and global Uppsala University, and an MSc in Davidson with one of its first Women Swedish companies in roles that Systems Engineering from Case Enabling Science and Technology awards span governance and oversight over Western Reserve University. in 2001. In 1999, she was inducted into financial reporting, internal control, He brings to Millicom’s Board his the Academy of Women Achievers of the and risk management processes and extensive experience in leading YWCA of the City of New York. procedures within global finance telecommunications and media functions. She brings to Millicom’s Board her long businesses and digital transformation in experience in the telecommunications INDEPENDENT from the Company, emerging markets. and IT sectors. its Executive Management, and its INDEPENDENT from the Company major shareholders. Ms. Davidson received a Bachelor of and its Executive Management, and its Science in physics from Lehigh MILLICOM SHAREHOLDING AT major shareholders. University, a Master of Science in JANUARY 31, 2020: 5,703 shares. MILLICOM SHAREHOLDING AT Electrical Engineering from Georgia JANUARY 31, 2020: 2,836 shares. Tech, and a Master of Science in Computer Science through Bell Laboratories. INDEPENDENT from the Company, its Executive Management, and its major shareholders. MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 4,431 shares.

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Board Profile: Skills and Experience–continued

Ms. Mercedes Johnson Mr. James Thompson (American) (American) Non-Executive Director Non-Executive Director (FIRST APPOINTED: MAY 2019) (FIRST APPOINTED: JANUARY 2019)

Ms. Mercedes Johnson joined the Board Mr. James Thompson was re-elected to in May 2019 and is a member of the the Board in May 2019. He is a member Audit Committee. of the Audit Committee and the Compensation Committee. Ms. Johnson (1954) is a U.S. citizen and currently serves on the Boards of three Mr. Thompson (1961), a U.S. citizen, is a other NASDAQ or NYSE listed Managing Principal at Kingfisher Family technology companies: Synopsys, a Office, where he manages a portfolio provider of solutions for designing and focused on value-oriented investment verifying advanced silicon chips; strategies. He is also a Non-Executive Teradyne, a developer and supplier of Director at C&C Group plc and serves automated semiconductor test on its Audit Committee. Previously, he equipment; and Maxim Integrated was a Managing Principal at Products, an integrated circuits designer Southeastern Asset Management, and producer. where he was responsible for the operations of the firm and was a senior Previously she served as Chief Financial member of the team responsible for Officer of Avago Technologies (now firm-wide investment decisions. Broadcom) and Chief Financial Officer Between 2001 and 2006, at LAM Research Corporation. Ms. Mr. Thompson opened and managed Johnson holds a degree in Accounting Southeastern Asset Management’s from the University of Buenos Aires. London research office. He holds an She brings to the Millicom Board years MBA from Darden School at the of experience at technology-oriented University of Virginia and a Bachelor’s multinational U.S. listed companies in degree in Business Administration from various capacities the University of North Carolina. INDEPENDENT from the Company, its Mr. Thompson brings extensive Executive Management, and its major investment management experience to shareholders. the Millicom Board and contributes significantly to the Board’s discussions MILLICOM SHAREHOLDING AT of Millicom’s long-term strategy and JANUARY 31, 2020: 1,748 shares. capital allocation. INDEPENDENT from the Company, its Executive Management, and its major shareholders. MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 9,155 shares.

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Board Program

The Board’s annual program includes:

1 2 3 Company strategy and Operating and financial Governance and strategic direction; performance review; compliance matters;

4 5 6 External affairs; Corporate culture; External financial reporting;

7 8 9 Risk management; Dividend policy; Acquisitions and divestments;

10 11 Evaluation of CEO and Human Resource matters, self-evaluation; and including compensation, health, safety, and well-being.

Summary of Board Activities in 2019 The Board of Directors has an annual program consisting of specific areas of focus on which the Board has a role to oversee and advise the Company. Specific projects and topics arise in the normal course of business which are added to the program of the Board; some of these are handled by specific Board committees.

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Summary of Areas of Focus in 2019

Activity/issues covered Board actions Reports of committees • Regularly reviewed reports from its Audit, Compliance and Business Conduct, and Compensation Committees on recent activities • Discussed Nomination Committee Director appointment proposals Operational review • Discussed priorities and challenges for each of the Latin American and African businesses, including development of cable and mobile data businesses, efficiency measures, and capital expenditure allocation • Discussed and approved the 2020 budget • Reviewed and approved spectrum acquisition, including in Colombia in December 2019 Strategic review • Discussed, reviewed and approved the strategy • Discussed with the Executive Team industry and geographic trends and the operational and financial strategy for each region, including the portfolio strategy Organizational structure and • Participated in performance reviews of the Executive Team, and of the management culture organizational and reporting structures • Reviewed cultural initiatives including ‘Sangre Tigo’ Review and approval of capital • Approved issuance of the $750 million bond to partly finance acquisition of the structure and dividend Telefonica businesses in Central America • Approval of additional financing and refinancing for both the Group and operating companies in several markets • Approval of additional financing and refinancing for in several markets • Recommended the dividend of $2.64 per share to the 2019 AGM • Approved issuance of SEK 2 billion Sustainability Bond Review and approval of corporate • Revisions to the Corporate Policy Manual (including Board and Committee charters) governance • Updated the authority matrix • Elected the Deputy Chairman and Committee members Mergers, acquisitions, disposals, • Discussed acquisition and disposal developments across the Group, including approval and joint ventures of transactions such as acquisition of the Telefonica business in Central America and the disposition of the business in Chad Review and approval of financial • 2018 Annual Report including the 2018 Consolidated Financial Statements of the reports Group, and interim consolidated financial statements • Standalone financial statements of Millicom International Cellular S.A. (the parent company) Risk management • Reviewed the key risks facing the Group and its approach to managing risks • Set the risk appetite of the Group External affairs • Reviewed the external affairs strategic framework, and implementation activities • Periodically reviewed the political situation by market with a specific focus on election periods and advice on related risk management requirements • Reviewed regulatory and engagement challenges with advice from the Board on best-practice engagement strategy • Reviewed the state of government relations in our markets and internationally Non-financial performance • Reviewed the main non-financial performance and trends, including corporate responsibility • Recommendations for continued focus in line with existing non-financial focus areas Shareholder structure • Support Kinnevik AB in the divestiture of its shareholding in Millicom

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Induction and Training detailed reports on specific areas that each Board member’s personal Millicom provides incoming Board support their understanding of performance is also reviewed. This members with information on their Millicom’s business and operating involves assessing Board and roles and responsibilities, the Board’s environment. committee actions and activities operating procedures, and Millicom’s against the Board’s mandate as Directors also participate in at least one business and industry. We provide determined in the Board Charter and annual visit to Millicom’s operations access to governance documents, those of its various committees. (Colombia and Panama in 2019) to policies, and procedures, meeting learn about the characteristics of the In 2019, the Board used a questionnaire materials and Company information local market, see aspects of the to assess its performance against the through a secure online tool, in business in operation, participate in Board’s key duties, it’s composition, and meetings set with the Executive social and corporate responsibility processes, and the performance of Management Team, and through projects, and interact with local individual Board members. The results ongoing dissemination of information. management. of the evaluation were presented to the Millicom provides training on topics Nomination Committee. such as anti-bribery and corruption, Board Effectiveness ethics, independence, and insider The Board conducts an annual trading. The Board regularly receives performance review process, wherein

Board Meetings/Attendance at regularly scheduled meetings of the Board in the 2019 financial year Meeting Director Attendance % Mr. José Antonio Rios Garcia 7/7 100 Mr. Odilon Almeida 7/7 100 Ms. Janet Davidson 6/7 86 Mr. Tomas Eliasson 7/7 100 Ms. Pernille Erenbjerg 6/7 86 Ms. Mercedes Johnson 4/4 100 Mr. Lars-Åke Norling 7/7 100 Mr. James Thompson 7/7 100 Attendance 50/52 96 Former Directors (until May 2019) Mr. Roger Solé Rafols 3/3 100 Overall attendance 53/55 96

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Board Committees environment in the context of the first to the important regulatory updates Written charters set out the objectives, year of its compliance with the and upcoming changes in financial limits of authority, organization, and Sarbanes-Oxley Act. We provided reporting, treasury, tax, risk roles and responsibilities of the Board oversight over implementation projects management, revenue assurance and and each of its Committees. The charters of new accounting standards, regular compliance. We continue to standardize are available at www.millicom.com/ reporting, internal control, risk and implement best practices both in our-company/governance/board- management, and internal audit controls and assurance across the committees/. Details of Board roles and activities. The Committee convened Group’s footprint. responsibilities, activities in 2019, and eight scheduled meetings during the I would like to thank my fellow Directors’ emoluments are set out on the year and covered internal audit and Committee members for their following pages. internal control activities during all dedication and commitment to the meetings. We held another six meetings activities of the Audit Committee. I look I. Audit Committee to review the requirements of the forward to continuing our mandate Sarbanes-Oxley Act and the progress of 2019 was a very active year for the through to the 2020 AGM. Audit Committee, with specific the Group on this program. Mr. Tomas Eliasson attention paid to enhancing and The committee also reviewed and Chairman of the Audit Committee expanding Millicom’s internal control discussed actions and activities related

Audit Committee membership and attendance at regularly scheduled meetings in 2019

Meeting Audit Committee Position First appointment Attendance % Mr. Tomas Eliasson Chairman* May 2014 8/8 100 Ms. Pernille Erenbjerg Member January 2019 6/8 75 Ms. Mercedes Johnson Member May 2019 5/5 100 Mr. James Thompson Member January 2019 8/8 100 Overall attendance 29/31 94

*Designated as having specific accounting competence as per the EU Directive.

In addition, the Chairman of the Board, external auditor. The Audit Committee Controller, Head of Internal Audit, Head Mr. José Antonio Rios Garcia attended all also oversees the establishment of of Business Controls, Head of Risk of the regularly scheduled meetings of accounting-related policies and Management, and representatives from the Audit Committee. procedures, procedure for dealing with EY, the Company’s external auditor, are certain other types of complaints or invited to attend Committee meetings. Appointment and role of the Audit concerns, and compliance with related The Audit Committee Chairman Committee laws and regulations. prepares the meeting agenda in The Audit Committee is composed solely The Audit Committee focuses on conjunction with the Chief Financial of non-executive Directors, all of whom compliance with financial requirements, Officer. Each meeting includes a private were independent Directors in 2019. accounting standards and judgments; session, attended only by Audit Members are appointed to ensure there appointment, oversight and Committee members and the external is a mixture of relevant experience in independence of the external auditors auditor, to provide an opportunity for both finance and broader commercial and appointment and oversight of open dialogue without management matters. The Board is confident that the certain other accounting firms that may present. collective experience of the members be retained from time to time; enables them to act as an effective At each regularly scheduled meeting, the transactions with related parties Audit Committee. The Committee is also Audit Committee receives reports from (including major shareholders); the satisfied that it has the expertise and the Chief Financial Officer, the External effectiveness of the Internal Audit resources available for it to fulfill its Auditor, the Head of Internal Audit, the function; the Group’s approach to risk responsibilities. Head of Business Controls, and the Head management; and ensuring an efficient of Risk Management. Additional reports The Board has delegated responsibility and effective system of internal controls. from other officers of the Company as to the Audit Committee for overseeing Ultimate responsibility for reviewing and required. The Audit Committee received the robustness, integrity, and approving Millicom’s Annual Report and the required information from the effectiveness of financial reporting, risk Accounts remains with the Board. external auditor in accordance with management, internal controls, internal Luxembourg regulations. audit and external audit processes, and The Chief Executive Officer, Chief pre-approval of certain audit and Financial Officer, Group Financial non-audit services provided by the

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Summary of Areas of Focus and Actions in 2019 Governance • Reviewed and amended the Audit Committee Charter Financial reporting • Reviewed key accounting and reporting issues at each meeting • Reviewed and approved each quarter’s earnings release, the 2018 annual earnings release and summary financial statements, and the 2019 half-year earnings release and interim financial statements • Reviewed status of the finance onboarding of the acquisitions made in 2018 and 2019 • Reviewed and discussed transition impact of IFRS 16 (“Leases”) and other changes in the financial reporting landscape and accounting policy changes/ updates External auditor • Received reports from the external auditor at each meeting covering important financial reporting, accounting and audit issues • Received reports from the external auditor in compliance with EU regulations • Reviewed and approved all non-audit services rendered by the external auditors • Approved the 2019 external audit strategy and fees • Considered the results of control testing performed by the external auditor and feedback on preparedness for the first Sarbanes-Oxley attestation • Considered the performance of the external auditor and independence, including monitoring of the nature and value of non-audit services, as well as approved the related fees • Received reports and updates on SEC rules and developments Internal audit activities • Approved the 2020 Internal Audit plan • Oversaw the appointment of a new Head of Internal Audit • Reviewed Internal Audit findings arising from the delivery of the 2019 audit plan Financing, treasury • Reviewed the Group’s tax strategy and structure and approved the tax policy and tax • Approved the updated Group treasury and related policies, including the policy on financial risk management Risk management • Provided guidance and oversight over risk management processes • Reviewed alignment of top risks with strategy • Reviewed regular risk reports and remediation plans Internal controls • Reviewed the remit and activities of the Business Controls team • Reviewed the Group’s Sarbanes-Oxley implementation plan related to the U.S. listing and received regular progress reports from the implementation team and external advisors • Received, reviewed findings and monitored progress in the design and operating effectiveness of internal controls over financial reporting Fraud management • Reviewed fraud policies and quarterly fraud reports, as well as proposed actions to remediate identified cases Revenue assurance • Received quarterly updates on revenue assurance activities • Reviewed trends and actions taken to minimize loss and revenue leakage Related party transactions • Reviewed related party transactions that were performed at each meeting

2019 Meetings • The transition impacts of the new Significant issues considered by the Audit The Audit Committee held eight regular lease standard, IFRS 16 Committee in relation to the financial meetings that mainly coinciding with key statements for the year ended • The appropriateness of and dates in Millicom’s external reporting: December 31, 2019 included: application of the Group’s accounting Financial reporting policies and practices 1 Acquisition of the Telefonica assets in Central America and finalization of The Audit Committee reviewed earnings • Compliance with financial reporting the purchase accounting of Cable releases for each quarter and financial standards and other financial Onda—refer to note A.1.2. of the statements, having received reports from reporting requirements consolidated financial statements management and the external auditor. In • The completeness and compliance of The Group completed the acquisitions 2019, the committee mainly focused on: all structural disclosures made in the of Telefonia Celular de Nicaragua • Significant accounting issues where financial statements (“Nicaragua”) and Telefonica Moviles judgment has been applied Panama, S.A. (“Panama”) on May 16 • Financial reporting and other and August 29, 2019, respectively, for a • The review of the effectiveness of implications of the U.S. listing total cash consideration of internal financial control and the $1.02 billion. The provisional goodwill A summary of all related party Group’s Sarbanes-Oxley for both acquisitions amount to transactions was reviewed and approved implementation plan and progress $646 million. The purchase accounting at each quarterly meeting. of Cable Onda has been finalized • The acquisitions and integration during 2019 and the final goodwill plans of Cable Onda and the amounts to $504 million. The Telefonica assets in Central America acquisition of Telefonica de Costa Rica

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TC, S.A. (“Costa Rica”) remains subject There are a number of matters management framework and process, to regulatory approvals as of therefore relating to tax contingencies including the formation and operation December 31, 2019. which require judgment as to the likely of a Management Risk Committee, as probability of cash outflow or the 2 Application of IFRS 16 ‘Leases’—refer well as reports on changes to potential amount of any outflow. The significant risks at both operational and to Introduction note and notes C.4. Audit Committee therefore received and E.3. of the consolidated Group level and how these risks are regular reports from the Group Tax managed. Further information is set financial statements Director as to the status of each of out in the risk management section of these matters, the likely outcome, the The Group had to change its this Annual Report. accounting policies as a result of provision required, if any, and adopting IFRS 16 Leases. On proposed disclosure in the financial In addition, the Audit Committee adoption, on January 1, 2019, an statements. Analysis of judgmental reviewed financial risk, tax risk and additional lease liability of tax matters was also presented by the strategy, treasury policy and risks, and $545 million was recognized. The external auditor. Group insurance coverage. application of the new standard 7. Revenue recognition—refer to Internal control decreased operating expenses by note B.1. of the consolidated $149 million, respectively, as financial statements As a consequence of the U.S. listing, the compared to what our results would Company commenced a program in have been if we had continued to Judgment is required in assessing 2018 to comply with the internal control follow IAS 17 for the three and twelve the application of revenue months ended December 31, 2019. recognition principles. This includes over financial reporting requirements of the application of revenue between the U.S. Sarbanes-Oxley Act. The Group 3. Africa divestment—refer to multiple deliverables, such as the Head of Business Controls, together note A.1.3. of the consolidated sale of a handsets with service in a with the Group’s external advisors, financial statements bundled package, or managed delivered progress reports on the On June 26, 2019, the Group services contracts that have complex Sarbanes-Oxley program. contractual agreements. The Audit completed the disposal of its The Audit Committee reviewed the operations in Chad for a cash Committee received regular updates on revenue recognition matters. Company’s internal control framework consideration of $110 million. On the and the enhancements required as part same date, Chad was 8. Capitalization and assets useful lives— of the internal control requirements of deconsolidated and a net gain of refer to notes E.1.1. and E.2.1. of the Sarbanes-Oxley. The planned scope of $69,547 million has been recognized consolidated financial statements in the Group’s statement of income. the program was discussed and agreed. The assessment and timing of Regular reports on the results of 4. Effect of listing of the shares held by whether assets meet the management testing of key internal the Group in Jumia Technologies AG capitalization criteria set out in the controls and the progress made to and Helios Towers Plc—refer to relevant accounting standards, the address any control gaps identified were notes C.7.3. of the consolidated estimation of appropriate useful received. financial statements economic lives and the assessment of whether any impairment indicators At the meeting of February 2020, the Jumia Technologies AG and Helios Committee received the final results of Towers Plc became listed in April and are present, such as redundant assets, management’s testing of key controls October 2019, respectively. On as well as the identification of leases, listing dates, the Group recognized all require judgment. In addition, together with the results of testing by these investments at fair value with Management regularly review and the external auditors. Management a corresponding total gain of benchmark its assets useful lives with concluded that the Group had $242 million. As at December 31, peers. Once a year, Management maintained effective internal controls 2019, the fair value of these presents its conclusions to the Audit over financial reporting. investments amounts to Committee. Those involved provided regular $371 million. Management Disclosure Committee updates on the Group’s program of 5. Impairment testing—refer to To assist with all matters related to Internal Control Self-Assessment and note E.1.6. of the consolidated earnings releases and financial the status of ongoing control financial statements statement disclosures, Millicom has a improvement projects. In 2019, the Group did not recognize Disclosure Committee comprising senior Internal Audit any goodwill impairment losses, but management from Finance, Legal, disclosed potential impairment for Communications, Investor Relations and Execution of the 2019 Internal Audit our operations in Nicaragua that other functions as and when required. Plan provided the Executive would have to be recorded in case of The Disclosure Committee identifies and Management Team and the Audit certain reasonable changes in key considers disclosure matters in market Committee an independent view on the assumptions. releases, including releases that may effectiveness of Millicom’s internal control environment and governance 6. Tax provisions and contingencies— contain material financial and other processes. The plan was developed to refer to note G.3.2. of the information. consolidated financial statements ensure alignment with the strategic Risk management risks of the Millicom Group, as well as The Group operates in many countries The Audit Committee received consideration of the overall Group where the tax and legal system is less regular reports on the Group’s risk strategy, input from senior mature and may be less predictable. management across multiple

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geographies and functions, external We assess audit quality by referring to partner will rotate off for the audit of audit findings and Internal Audit’s the standard of the reports received by the consolidated financial statements knowledge of the business. the Audit Committee, the caliber of as of December 31, 2025, at the latest. senior members of the audit team and In December 2019, the Audit Audit tendering the level of challenge provided to Committee approved the Internal Audit Executive Management. Also, Millicom first appointed EY as external Plan for 2020, which included reviews management provides feedback to the auditor of the Company for the focusing on Mobile and B2B revenue Audit Committee. In addition, year ended December 31, 2012, streams, information security, IT and management regularly reviews the following a competitive tender. Based network resilience, key financial performance of the external auditors on the most restrictive EU audit processes, compliance and ethics both centrally and in each of Millicom’s regulations, and applicable activities—including the anti-money operating countries. This feedback Luxembourg law, EY would have to laundering (“AML”) program—and allows the Committee to monitor and rotate off the audit by 2032 (20 years management and governance assess the performance of the external after initial appointment) at the latest, supporting outsourced service contracts. auditor as part of making a with a mandatory tender for the audit We also built follow-up audits into recommendation to the Board to occur in 2022 (ten years after initial the Internal Audit Plan to provide regarding the auditor’s appointment. appointment). independent assurance that Auditor independence II. Compliance and Business management actions from previous Conduct Committee audits had been addressed effectively. The Audit Committee has established The Compliance and Business Conduct The plan was primarily executed by the policies to maintain the independence Committee oversees the Group’s Ethics in-house Internal Audit team based in of the external auditor and to govern & Compliance Program, and reports on London, Luxembourg and Miami, with the provision of audit and non-audit the Program’s status and development support from specialists at one of the services. The policies and approval to the full Board of Directors. “Big 4” accounting firms. At each process of non-audit services and meeting, the Audit Committee received audit-related services comply with SEC During 2019, we continued building and an update on Internal Audit activities, independence rules and with the latest refining our Ethics & Compliance progress against the plan and results of EU and local regulations. Under these Program, supported by the Executive the audits completed in the period, rules, the Audit Committee pre-approves Team’s relentless commitment to including associated recommendations a list of services that can be rendered by maintain our culture, Sangre Tigo, which and management action plans where the audit firm. If services to be rendered is centered around doing business the findings had been identified. are pre-approved in nature, these can be right way, with the application of ethics approved by management when and compliance in our everyday In December 2019 a new Head of requested (following an established interactions. Our Sangre Tigo signifies Internal Audit joined the Company. The authority matrix) and then presented to high integrity and zero tolerance for any Audit Committee oversaw the the Audit Committee on a quarterly form of corruption, and a commitment recruitment and transition process. basis for formal approval. If services to to doing business the right way. Fraud risk and whistleblowing be rendered are not pre-approved, they On behalf of the Board, I would like to should be pre-approved by the The Audit Committee received and reconfirm our commitment to a culture Chairman of the Audit Committee when reviewed quarterly fraud reports in of ethics and strong compliance that requested and then submitted to the accordance with the Group’s Fraud policy. leads to success for the business and next full audit committee for formal The Group provides an ethics helpline pride for our company. approval. A schedule of all non-audit that is administered by an independent engagements with the external auditor We are proud to be a compliance leader third party and is available to all is reviewed at each meeting. in our markets and look forward to employees, contractors and third parties. engaging with our customers as well as For the year ended December 31, 2019, External Audit effectiveness our stakeholders by making it happen the Audit Committee approved fees for the right way. The quality and effectiveness of the audit and audit related services of external audit matters greatly to the $8.1 million, together with fees for Ms. Janet Davidson Audit Committee. A detailed audit plan non-audit work of $0.7 million. Chairman of the Compliance and outlining the key risks and proposed Business Conduct Committee In compliance with independence rules, geographical coverage is prepared and the previous audit partner rotated off discussed with the Audit Committee at the audit in 2019 and the current audit the start of each annual audit cycle.

Compliance and Business Conduct Committee Membership and Attendance 2019

First Meeting Committee Position appointment Attendance % Ms. Janet Davidson Chairman May 2016 3/4 75 Mr. Lars-Åke Norling Member May 2018 4/4 100 Mr. Odilon Almeida Member November 2015 3/4 75 Overall attendance 10/12 83

Millicom 2019 Annual Report 83 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

In addition, the Chairman of the Board, • Monitors the investigations resulting Summary of Committee Activities Mr. José Antonio Rios Garcia, attended from cases brought through the in 2019 three of the four regularly scheduled Group’s ethics line or otherwise The Committee Chairman prepares the meetings of the Compliance and agenda in conjunction with the Chief • Oversees allocation of resources and Business Conduct Committee. Ethics and Compliance Officer. During personnel to the Compliance area meetings, the Committee reviews the Appointment and Role of the • Assesses the Group’s performance in status of the Ethics & Compliance Compliance and Business Conduct the Compliance area Program, compliance-related issues, Committee Strategic Responses (such as Millicom’s Compliance and Business • Ensures that the Group maintains investigations) to any alleged violations Conduct Committee oversees and makes proper standards of business of law or policy, (AML) initiatives, recommendations to the Board conduct information security topics, and any regarding the Group’s compliance Management representatives invited to Internal Audit Reports and remediation programs and standards of business attend the Compliance and Business plans that concern the Ethics & conduct. More specifically, the Conduct Committee include the Group Compliance Program. Compliance and Business Conduct CEO, Chief Compliance and Ethics Officer, Committee: The CEO and Executive Team are General Counsel, Group CFO, Chief committed to our Sangre Tigo and are • Monitors the Group’s Compliance External Affairs Officer, Head of Internal actively involved in fostering a culture program, including the activities Audit and Head of Risk Management. of ethics and compliance from the top performed by the Compliance Team across all our lines of business. and its interaction with the rest of the organization

Summary of Areas of Focus and Action Items in 2019 Program elements reviewed • Refined third party management through a centralized due diligence program • Anti-corruption program policies and automated procedures including those covering new and emerging areas of risk and strengthening of the overall program • Revision of compliance policies and procedures, and communication to the whole organization • Training completion rates on company compliance policies as part of select managers’ KPIs • Results of continuing review of the compliance framework by Internal Audit as well as remediation actions and status • Improved communication campaigns on various compliance subjects • Compliance Risk Assessment—established proactive compliance risk management process. Regularly monitor, collect and analyze data to identify and remediate gaps • Resources: hired three new compliance officers. • A number of GMs were given a set of compliance KPIs to meet during the year for year-end bonus award • Integration of compliance program in newly acquired entities in Central America • Incentives program—Compliance factors were incorporated into executives’ incentives program for the second consecutive year. Bonus awards are now tied to achievement of all compliance KPIs Reporting & Investigations • “SpeakUp” Campaign—continued to encourage employees to use the system to report issues of perceived non-compliance with our policies and values • Strengthened investigations team, and further developed investigations resources centrally and in the operations • Continued to align investigation procedures across the countries • Continued effective case management, including by taking reasonable steps after detection of misconduct Global Anti-money laundering (AML) • Continued enhanced country review methodology with the implementation of a new program Country Review Sheet • Completed implementation of new monitoring systems in Honduras and El Salvador, with Bolivia and Paraguay in progress. Enhanced monitoring tool in Tanzania in progress. • Deployed updated AML training and AML campaign • Created and hired a new AML Risk Management position • Conducted external assessments of central and operations, and continued to implement recommendations based on the results of the assessment

Millicom 2019 Annual Report 84 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

III. Compensation Committee and financial success and provides management, including at each of our In 2019, the Compensation Committee incentives for our management team to operations. The proportion of overall continued to focus on reviewing execute our financial and operational pay tied to performance is higher for Millicom’s reward strategy to ensure goals creating a supportive environment employees at more senior levels in the that senior management compensation around pay for performance. organization, reflecting their closely reflects company performance. opportunity for broader impact on We achieved much this year, re-listing company performance. We use equity The design of our employee and on NASDAQ in the U.S., acquiring new awards to align employee and executive compensation programs assets in Latin America, and selling shareholder interests. We have share supports three main goals: one of our African operations, and we ownership requirements for our top 50 consider these and other 1. Attract and retain great talent roles and track the status of each role developments in our shareholder base annually. This encourages our top 2. Support our culture of and the external marketplace in the leaders to take a longer-term view on entrepreneurship and performance, setting of remuneration philosophy positive business performance in with an increased focus on pay and practices. alignment with company and based on geographical / line-of- The Compensation Committee regularly shareholder interests. business accountability reviews best practices in executive I would like to thank my fellow 3. Align employee and shareholder compensation and governance and members for their dedication and interests revises our policies and practices when commitment to the activities of the appropriate. For example, in 2019 we We pay employees competitively Compensation Committee and look revised our change in control compared with other opportunities they forward to continuing our mandate agreements for eligible executives to might have in their respective local through to the 2020 AGM. include “double-trigger” provisions, markets. We also offer competitive which require an involuntary termination benefits to promote the health and (in addition to change in control) for Ms. Pernille Erenbjerg happiness of our employees and create accelerated vesting of awards. a fun and invigorating work culture. Our Chairman of the Compensation compensation program plays a key role An important portion of compensation Committee in promoting our company’s operating is tied to performance for all senior

Compensation Committee Membership and Attendance in 2019

First Meeting Committee Position appointment Attendance % Ms. Pernille Erenbjerg Chairman January 2019 5/5 100 Mr. Lars-Ake Norling Member May 2019 4/5 80 Mr. James Thompson Member January 2019 5/5 100 Overall attendance 14/15 93

In addition, the Chairman of the Board, Mr. José Antonio Rios Garcia, attended all of the regularly scheduled meetings of the Compensation Committee.

Millicom 2019 Annual Report 85 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Appointment and Role of the requires Board approval. Guidelines for The evaluation of the CEO is conducted Compensation Committee remuneration of senior management by the Compensation Committee. The The Compensation Committee reviews and for employees’ share-based evaluation criteria and the results of and makes recommendations to the incentive plans are approved by the the evaluation are then discussed by Board of Directors regarding the shareholders at the AGM. the Chairman with the entire Board. compensation of the CEO and other The Board considered that the CEO The Compensation Committee monitor senior managers as well as management provided strong leadership for the and evaluate programs for variable succession planning. Company during 2019. The Chairman remuneration to the senior of the Board conveyed the results of management, both ongoing programs The Board, based on guidelines by the the review and evaluation to the CEO. Compensation Committee, proposes the and those that have ended during the remuneration of senior management. year and monitor and evaluate the Main Activities of the Committee The guidelines ensure that Millicom can application of the guidelines for during 2019 attract, motivate and retain executives, remuneration to the board and senior The Compensation Committee met five within the context of Millicom’s management that the shareholders’ times in 2019. international talent pool, which primarily meeting has established, as well as the consists of telecom, media, and FMCG current remuneration structures and companies. Remuneration of the CEO levels in the Company.

Summary of Areas of Focus and Action Items in 2019

Bonus and performance reports • Received and reviewed senior executive 2018 performance reports and Executive Committee individual payouts STI/LTI (cash /equity) • Reviewed and approved the 2019 variable compensation target and performance results Compensation review • Approved all payments for Executive Committee members, including base pay increases • Reviewed executive remuneration and governance trends and developments • Conducted a review of gender equity across all operations • Reviewed and approved the peer group for executive benchmarking • Approved changes to CEO and Executive Committee compensation elements based on market competitiveness Share-based incentive plans • Reviewed and approved the 2019 Share Plan Rules • Approved the 2016 LTI (PSP) vesting • Reviewed and approved all equity grants • Reviewed the treasury shares’ balance reserved for share-based incentive plans and the period they cover • Reviewed shared ownership guidelines and the compliance of each covered executive • Reviewed performance and projections of outstanding LTI plans Global reward strategy and • Reviewed Remuneration/C&B Philosophy & Strategy executive remuneration review Variable pay design • Reviewed and approved incorporation of M&A financials into the ongoing STI and LTI • Implemented 2020 STI metrics—IFRS 16 • Discussed and approved STI/LTI design for 2019 • Reviewed and approved STI and LTI performance measures for 2020 Other • Following U.S. best practices implemented a double-trigger change in control • Reviewed and approved exceptional items, new hire equity grants, etc • Approved LTI retirement eligibility approach • Reviewed GSMT severance plan payout • Reviewed budget for the upcoming year • Discussed diversity and Inclusion Strategy Compensation Committee • Reviewed and updated Compensation Committee Remit and Obligations governance • Review and approved the Compensation Committee annual meeting cycle and calendar • Reviewed the Compensation Committee charter • Updated Executive Compensation dashboard • Reviewed of composition of the Compensation Committee • Reviewed and approved an external compensation consultant

Millicom 2019 Annual Report 86 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Remuneration Guidelines Executive’s contract is 100% of the approximately the top 50 roles and have The Board proposes to the AGM base salary and, in case of exceptional a three-year cliff vesting. guidelines for remuneration and other business and personal performance, up Other benefits: These can include a car employment terms for senior to two times that target. The variable allowance, medical coverage, and in management. The annual base salary amounts or percentages are considered cases of expatriate assignments, a and other benefits of the CEO is to be competitive within market housing allowance, school fees, home proposed by the Compensation standards at total compensation levels. leave, and other travel expenses. Committee and approved by the Board. The variable remuneration is based on performance of the Executives in Pension: The Executives are eligible to Remuneration Policy relation to established goals and participate in a global pension plan, in Remuneration packages for members targets along with Millicom’s financial accordance with market standards. The of the Executive Team at Millicom performance (see table below). global pension plan is secured through comprise an annual base salary, an premiums paid to reputable insurance annual bonus, share-based Use and relative weighting of financial companies. compensation, social security performance target measures under contributions, pension contributions the variable compensation rules are Deviations from the guidelines: In and other benefits. Bonus and share- equal to all employees regardless of special circumstances, the Board may based compensation plans (see note seniority. deviate from the above guidelines, such B.4. to the consolidated financial as additional variable remuneration in Variable STI share-based statements) are based on actual the case of exceptional performance. In remuneration: A portion of the STI is performance. Share-based these instances, the Board of Directors paid in the form of deferred shares with compensation is granted once a year by will explain the reason for the deviation a three-year pro-rated vesting, the Compensation Committee. at the following AGM. strengthening our pay for performance Base salary: The Executives’ base and retention incentives. Payment for loss of office: In the event salaries are competitive and based on of a company-initiated termination, Long-term share-based incentive plans each individual Executive’s other than for cause, of someone on (“ LTIPs ”): The aim of the LTIPs is to responsibilities and performance. our Executive Team (e.g., the CEO and support Millicom’s long-term business his/her direct reports), a notice period Variable STI (Short-Term Incentive) view and strategy. The plans and the of up to 12 months potentially applies. cash remuneration: The Executives amounts need to be competitive in order may receive variable remuneration in to attract and retain key executives. addition to base salary. The maximum These incentives are targeted toward a target variable remuneration in any selected group of employees only,

Bonus measurements Rationale Weighting Personal performance The individual goals and objectives of Millicom management and employees are 30% critical in achieving its financial objectives and in long-term value creation. Service Revenue Recurring revenue is a key growth measure used by the Group as it seeks to monetize 20% opportunities in all countries and all business units. EBITDA EBITDA is used as a measurement of ongoing earning power/value creation in the 20% Group and of how well management controls the operational cost of growing revenue. Operating Free Cash Flow Operating Free Cash Flow is OCF (EBITDA less Capex) less changes in working capital 20% and other non-cash items and taxes paid. It is used to measure how efficiently management are generating cash flow. Net Promoter Score The Net Promoter Score is an index that measures the willingness of customers to 10% recommend a company’s products or services to others. Total 100%

Millicom 2019 Annual Report 87 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Executive Team Remuneration Executives Compensation of the Executive Team 2019 CEO CFO (8 members) Cash Compensation ($ ‘000)* Base salary 1,167 654 3,498 Bonus (for 2019 performance) 1,428 626 2,098 Pension 279 98 798 Other benefits* 50 260 1,521 Termination benefits 0 0 863 Total salary and benefits 2,924 1,639 8,779

Equity Compensation (number of shares) Performance share plan(i) 40,565 20,030 55,756 Deferred share plan(ii) (for 2019 performance) 31,126 13,657 41,285 Total shares (number) 71,691 33,687 97,041 Value of shares(iii) ($ ’000) 3,383 1,592 4,582

(i) Vesting amounts relating to the 2017 performance share plan based on the estimated performance over the three year period. The value of shares is based on the closing market value of Millicom shares at December 31, 2019 of $48.23. These shares will vest on March 2020. Final performance metrics will be approved by the Remuneration Committee in March 2020. (ii) Amounts to be granted relating to the 2020 deferred share plan (awarded in 2020 based on 2019 results). The value of shares is based on the average Q4 2019 closing market value of Millicom shares of $45.86. These shares will vest over three years from the award date with a vesting schedule 30%/30%/40%, dependent on continued service of the employee. (iii) The value is calculated on the basis described above which differs from the value calculated for the IFRS financial statements. * ‘Other Benefits’ for ‘Other Executives’ include medical and dental insurance for former CHRO. Other Executives Compensation of the Executive Team 2018 CEO CFO (9 members) Cash Compensation ($ ‘000)* Base salary 1,112 673 3,930 Bonus (for 2018 performance) 1,492 557 2,445 Pension 247 101 962 Other benefits 66 63 805 Termination benefits 0 0 301 Total salary and benefits 2,918 1,393 8,444

Equity Compensation (number of shares)* Performance share plan(i) 34,154 17,716 41,710 Deferred share plan(ii) (for 2017 performance) 25,011 9,339 40,988 Total shares (number) 59,165 27,055 82,698 Value of shares(iii) ($ ’000) 3,628 1,665 5,053

(i) Amounts relating to the 2016 performance share plan based on the estimated performance over the three year period. The value of shares is based on the closing market value of Millicom shares in $ at 28 December 2018 of $62.53. These shares will vest on 1 March 2019. Final performance metrics will be approved by the Remuneration Committee on March 5, 2019. (ii) Amounts relating to the 2019 deferred share plan (awarded in 2019 based on 2018 results). The value of shares is based on the average Q4 closing market value of Millicom shares of $59.65. These shares will vest over three years from the award date with a vesting schedule 30%/30%/40%, dependent on continued service of the employee. (iii) The value is calculated on the basis described above which differs from the value calculated for the IFRS financial statements. * ‘Other Executives’ includes compensation related to former EVP strategy and former EVP CHRO. ** ‘Other Benefits’ include relocation support when applicable with an average amount of $25K.

Millicom 2019 Annual Report 88 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Share-based Incentive Plans The share-based incentive plans currently year, 30% after two years and 40% after exception) under the plans set out in the consist of a Deferred Share Plan (DSP) and a three years). Shares granted under the 2019 following table. Performance Share Plan (“PSP”). PSP vest at the end of a three-year period, In addition, the rules of the plans set out whereby vesting is subject to certain company The 2020 DSP represents the portion of the certain criteria and conditions in which new performance conditions. STI (based on 2019 performance) that will employees can receive sign-on awards. In be granted in deferred shares in Q1 2020. The CEO and CFO participate in the Group’s countries where Millicom has a local partner, The 2019 PSP (LTIP) represents the grant of 2019 PSP, with target opportunities as per in certain cases, the same eligibility and performance shares in Q1 2019, linked to the table below. For the 2019 year, we rules apply for the incentive plans, except performance for the period from 2019-2021 offered equity-based incentive plans to the that instead of being granted awards and vesting in Q1 2022. CEO, the CFO, members of the executive denominated in Millicom shares, the management, other senior management, executives receive deferred cash awards. Shares granted under the 2020 DSP are based and high-potential employees and on personal and corporate performance in employees in key roles (by nomination 2019 and vest over three years (30% after one

Maximum shares awarded Basis for LTIP Eligibility Participants for 2019 calculating award Comment 2020 Deferred Share Plan CEO, CFO, other 245 377,578 20–100% of base (DSP) executives and other salary global senior management 2019 Performance Share CEO, CFO, other 44 257,601 400% CEO Plan (PSP) executives and other 175% CFO global senior 50%–160% Global senior management of base salary, as management per 01.01.19 team

*A limited number of high-potential employees and employees in key roles can be nominated by exception.

Specific rules of each plan are set out below. Vesting under all plans is conditional upon the participant remaining employed by the Group at each vesting date. Additional vesting criteria are noted under each plan.

Vesting period Additional vesting criteria LTIP (terms and conditions) 1 year 2 years 3 years 2020 Deferred Share Plan (DSP) 0 30.0% 30.0% 40% 2019 Performance Share Plan (PSP) Achievement of Service Revenue CAGR, Operating Free 0 0 100% Cash Flow CAGR and Relative Total Shareholder Return targets measured over the three-year vesting period.

Measurements used for PSP performance measure Weighting Operating Free Cash Flow (OFCF) with a specific 3-year CAGR target 50% Service Revenue with a specific 3-year CAGR target 25% Relative Total Shareholder Return (RTSR) vis-vis a peer group of companies (no award is made for performance below 25% peer group median. Achieving TSR performance at media of pre-determined peer triggers 25% of the relative TSR component)

Millicom 2019 Annual Report 89 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

CEO Compensation The 2019 components of the CEO remuneration package were: 0 • An annual base salary of $1.173 million; • Variable cash remuneration with a target of 100% of base salary; At target • Participation in Millicom’s share-based compensation plans and; 9 000 • Other standard benefits, as described under the senior management 1 remuneration principles earlier in this report.

CEO Earnings Opportunity from 2019 Award Levels The tables below provide estimates of the potential future remuneration a 22 Beneﬁts $51 + are 0 for the CEO based on the remuneration opportunity granted in the 2019 TOTAL 8,363 financial year. Potential outcomes are based on different performance scenarios. 1 Assumptions underlying each scenario are described below.

Fixed • Fixed income consists of base salary, employment benefits and At target company pension contributions. 000 • Base salary is at December 31, 2019. • Benefits and pension are valued using the figures in the total remuneration for the 2019 financial year table detailed below. • Pension contributions are made at 15% of base salary as at December of the preceding year. ie 1 ariale 900 TOTAL 8,363 Base Benefits Pension Total Fixed ($ ’000) ($ ’000) ($ ’000) ($ ’000) Mauricio Ramos 1,173 50 279 1,502

Variables on target • Values are based on what the CEO would receive if performance were to align with Incentive Performance Targets. • The target award opportunity for the annual cash bonus is 100% of base salary. 2 • The target award opportunity for the Deferred Share Plan (DSP) is 100% of base salary for the CEO. • The target award opportunity for the Performance Share Plan (PSP) is At maximum 0 400% of base salary for the CEO, assuming Relative TSR 000 performance is at peer group median and the CAGR for both Service Revenue and OFCF are at target. Variables at maximum • Maximum award opportunity under the annual cash bonus is 200% a 12 Beneﬁts 1 are 1100 of base salary. TOTAL 15,263 • Maximum award for performance under the DSP is 200% of base salary. • Maximum award for performance under the PSP is 800% of base salary. • The maximum award would be achieved when relative total shareholder return (“RTSR”) outperforms the peer group median by 10 20% and the CAGR for both Service Revenue and OFCF are at 120% of target. At maximum 000 90

ie 1 ariale 100 TOTAL 15,263

Millicom 2019 Annual Report 90 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Details of Share Purchase and Sale holding of common shares in the 2019 Activity Company in order to align their Global Senior Management Level % During 2019, Millicom’s CEO, interests with those of our shareholders. CEO 400 Mr. Mauricio Ramos, acquired 45,000 All Share Plan participants in the Global CFO 200 Millicom shares. Senior Management Team (including all EVPs 100 Executives) are required to own Millicom Shareholding Requirements shares to a value of a percentage of General managers and VPs 50 Millicom’s share ownership policy sets their respective base salary as of Unless this requirement is met each out the Compensation Committee’s January of the calendar year. year, no vested Millicom shares can be requirements on Global Senior sold by the individual. Managers to retain and hold a personal

Share ownership and unvested share awards granted from company equity plans CFO and (number of shares) CEO EVPs Total December 31, 2019 Share ownership (vested from equity plans and otherwise acquired) 190,577 136,306 326,883 Share awards not vested 236,211 334,193 570,404 December 31, 2018 Share ownership (vested from equity plans and otherwise acquired) 122,310 84,782 207,092 Share awards not vested 172,485 339,726 512,211

2019 Remuneration for the voting on their own compensation. The Compliance and Business Conduct Chairman, Deputy Chairman and Nomination Committee reviews and Committee, and Compensation Non-Executive Directors recommends the Directors’ fees, which Committee. Decisions on annual remuneration of are approved by the shareholders at the The remuneration of Directors comprises Directors (“tantièmes”) are reserved by AGM or EGM. Fees are set based on the an annual fee and shares denominated the Articles of Association to the role (Chairman, Deputy Chairman), and in U.S. dollars (USD). Director general meeting of shareholders. for participation in and roles of remuneration for the period is as follows: Directors are therefore prevented from Chairman of the Audit Committee, the

Remuneration Remuneration 2019 2018 Board and committees USD 000s(i) USD 000s(ii) Directors Mr. José Antonio Rios Garcia (Chairman) 366 124 Ms. Pernille Erenbjerg (Deputy Chairman) 350 — Mr. Odilon Almeida 173 121 Ms. Janet Davidson 186 125 Mr. Tomas Eliasson 211 144 Ms. Mercedes Johnson 173 — Mr. Lars-Åke Norling 206 87(iii) Mr. James Thompson 242 — Former Director (until May 2019): Mr. Roger Solé Rafols 16 98 Former Directors (until January 2019): Mr. Tom Boardman (former Chairman) — 169(iv) Mr. Anders Jensen — 75(iv) Total ($ ’000)(i) 1,923 943

(i) Remuneration covers the period from January 7, 2019 to the date of the AGM in May 2020 as resolved at the shareholder meetings on January 7, 2019 and May 2, 2019 respectively. Share based compensation for the period from May 2, 2019 to May 2020 based on the market value of Millicom shares on May 6, 2019 (in total 16,607 shares). Net remuneration for the period from May 2, 2019 to May 2020 comprised 73% in shares and 27% in cash (2018: 51% in shares and 49% in cash). (ii) Cash compensation was denominated in SEK in 2018 and was converted from SEK to USD at exchange rates on payments dates each year. (iii) From the period from September 1, 2018 to the 2019 AGM on May 2, 2019. (iv) From the period from the 2018 AGM to the date of the EGM in January 2019.

Millicom 2019 Annual Report 91 CORPORATE GOVERNANCE REPORT 2020 Millicom International Cellular S.A. Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Millicom CEO and Executive Team

CEO Position Role and responsibilities Mr. Mauricio Ramos CEO • Leading the development and execution of the Company’s strategy. • Day-to-day activities and management decisions, both operating and financial. • Liaison between the Board and Management of the Company. • Leading the Executive Team.

Mauricio Ramos, born in 1968, joined Millicom in April 2015 as CEO. Previously he was President of Liberty Global’s Latin American division from 2006 until February 2015. Mauricio held several leadership roles at Liberty Global, including Chairman and CEO of VTR in Chile, Chief Financial Officer of Liberty’s Latin American division and President of Liberty Puerto Rico. Mauricio is also a Member of the Board of Directors of Charter Communications (U.S.). He is a dual Colombian and U.S. citizen who received a degree in Economics, a degree Mr. Mauricio Ramos in Law and a postgraduate degree in Financial Law from Universidad de Los Andes in Chief Executive Officer Bogota.

MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 190,577 shares

Millicom’s Executive Team members support the CEO in the day-to-day operation and management of the Group, within their specific areas of expertise. The team meets at least monthly and more frequently when required. Millicom’s Executive Team is as follows:

Executive Team Role Responsibilities Mr. Tim Pennington Chief Financial Officer Finance and financial planning. Reporting financial performance, including external financial reporting. Budgeting and forecasting, monitoring expenditures and costs. Implementation and enhancement of related controls. Risk management. Oversight of the African businesses. Mr. Esteban Iriarte Chief Operating Officer–Latam Operations and development of the Latin American businesses. Mr. Xavier Rocoplan Chief Technology and Information Officer Networks, information technology and procurement within the Group. Ms. Rachel Samrén Chief External Affairs Officer Government relations, regulatory affairs, corporate communications, corporate responsibility and corporate security. Mr. Salvador Escalón General Counsel Legal and corporate governance matters including oversight, identification, and management of legal issues and cases of the Group, as well as legal aspects of mergers and acquisitions and other corporate transactions. Ms. Susy Bobenrieth Chief Human Resources Officer Human resource matters including talent acquisition and management, compensation, diversity, and inclusion. Ms. Cara Viglucci Interim Head of Ethics and Compliance Compliance matters including ethics, anti-bribery, Officer anti-corruption, anti-money laundering, and related compliance programs. Also information security.

Millicom 2019 Annual Report 92 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

The profiles of the CFO and Executive Team members are provided below:

Mr. Tim Pennington Mr. Esteban Iriarte Mr. Xavier Rocoplan Executive Vice President, Executive Vice President, Executive Vice President, Chief Technology Chief Financial Officer Chief Operating Officer, Latin America and Information Officer

Tim Pennington joined Millicom in June Esteban Iriarte was appointed as Xavier Rocoplan started at Millicom in 2014 as Senior Executive Vice President Executive Vice President and Chief 2000 and joined the Executive Team as and Chief Financial Officer. Operating Officer (COO), Latin America Chief Technology and Information in August 2016. Technology Officer in December 2012. Previously, he was the Chief Financial Officer at Cable and Wireless Previously, Esteban was General Xavier currently leads all mobile and Communications plc, Group Finance Manager of Millicom’s Colombian fixed network and IT and procurement Director for Cable and Wireless plc and businesses where, in 2014, he led the and supply chain activities across the CFO of Hutchison Telecommunications merger and integration of Tigo and the Group. International Ltd, based in Hong Kong. fixed-line company UNE. Xavier initially served as Millicom’s CTO in Tim also served as Finance Director of Prior to leading Tigo Colombia, Esteban Vietnam and subsequently in Southeast Hutchison 3G (UK), Hutchison was head of Millicom’s regional Home Asia. In 2004, he became CEO of Paktel, Whampoa’s British mobile business. He and B2B divisions. Millicom’s subsidiary in Pakistan where he also has corporate finance experience, launched Paktel’s GSM operation and led firstly as a Director at Samuel Montagu & From 2009 to 2011, he was CEO of the process that concluded with the Co. Limited, and as Managing Director of Amnet, a leading service provider in disposal of the business in 2007. ). Xavier HSBC Investment Bank within its Central America for broadband, cable then served as head of Corporate Corporate Finance and Advisory TV, fixed line, and data services, which Business Development, where he Department. Millicom acquired in 2008. managed the disposal of various Millicom Tim is also a Member of the Board of In 2016, Esteban joined the Board of operations in Asia, the monetization of Directors of Euromoney Institutional Directors of Sura Asset Management, Millicom infrastructure assets (towers) as Investor plc. one of Latin America’s leading financial well as numerous spectrum acquisitions groups. and license renewal processes in Africa He is a British national and holds a BA and in Latin America. (Honors) degree in Economics and Esteban is from Argentina. He received Social Studies from the University of a degree in Business Administration Xavier is a French national, holds Manchester. from the Pontificia Universidad Catolica Masters degrees in engineering from Argentina “Santa Maria de los Buenos Ecole Nationale Supérieure des MILLICOM SHAREHOLDING AT Aires”, and an MBA from the Télécommunications de Paris and in JANUARY 31, 2020: 28,378 shares Universidad Austral in Buenos Aires. economics from Université Paris IX Dauphine. MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 29,657 shares MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 38,533 shares

Millicom 2019 Annual Report 93 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Ms. Rachel Samrén Mr. Salvador Escalón Ms. Susy Bobenrieth Executive Vice President, Executive Vice President, Executive Vice President, Chief External Affairs Officer General Counsel Chief Human Resources Officer

Rachel joined Millicom in July 2014 and Salvador Escalón became Millicom’s Susy Bobenrieth, a global human manages the group’s Government General Counsel in March 2013 and resource professional, joined Millicom Relations, Regulatory Affairs, Corporate Executive Vice President in July 2015. with over 25 years of experience in Communications, Corporate He leads Millicom’s legal team and major multi-national companies that Responsibility, and Security & Crisis advises the Board of Directors and include Nike Inc., American President Management functions. senior management on legal and Lines, and IBM. governance matters. Her focus is on developing and driving As an ex-Nike executive, she has Millicom’s global engagement with Salvador joined Millicom as Associate extensive international knowledge and particular responsibility for special General Counsel Latin America in April proven results in leading large-scale situation strategies. 2010. In this role, he led legal organizational transformations, driving negotiations for the merger of Millicom’s talent-management agendas and Rachel’s background is in the risk Colombian operations with UNE-EPM leading teams. She is passionate about management consulting sector Telecomunicaciones S.A., as well as the building great businesses and winning including serving as Head of Business acquisition of Cablevision Paraguay. with high- performing teams. Intelligence at The Risk Advisory Group plc. Previously, she worked for Citigroup As Senior Counsel at Chevron Susy is one of eight children raised in as well as non- governmental and Corporation from January 2006 to the U.S. by Chilean immigrant parents. governmental organizations. March 2010, Salvador oversaw legal She has deep international experience matters related to Chevron’s having lived and worked in Mexico, the Rachel currently serves on the Board of downstream operations in Latin U.S., Brazil, the Netherlands, and Spain. MIC Tanzania Limited. She holds a BSc in America. Previously, he practiced at the She holds a degree from the University International Relations from the London law firms Skadden, Morgan Lewis, and of Maryland, University College in 1989. School of Economics and an MLitt in Akerman Senterfitt. International Security Studies from the MILLICOM SHAREHOLDING AT University of St Andrews. Salvador is an American national, holds JANUARY 31, 2020: no shares a J.D. from Columbia Law School and a MILLICOM SHAREHOLDING AT B.B.A. in Finance and International JANUARY 31, 2020: 10,309 shares Business from Florida International University. MILLICOM SHAREHOLDING AT JANUARY 31, 2020: 28,940 shares

Millicom 2019 Annual Report 94 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Management Governance attestation as at December 31, 2019. An Each operation prepares a quarterly The Group seeks to embed governance extensive work program was undertaken fraud report and a summary of this is activities in the daily operations of all to assess the existing Millicom control presented to the Audit Committee businesses and in the Group’s corporate framework and develop it further to meet along with the key actions taken. functions. The role of the Group’s the requirements of Sarbanes-Oxley. We Quantitative and qualitative thresholds governance functions is to set policies designed and implemented a process for govern the reporting of individual fraud and procedures in accordance with our management testing of key financial incidents to the Group CFO, CEO, and obligations and international best controls during the year. The updated Audit Committee. practices. These functions then ensure control framework and management Internal Control over Financial policies and procedures are embedded testing program was rolled out across our Reporting in our businesses and serve to monitor largest markets, headquarters and our The management of Millicom is compliance. shared service functions and represents a responsible for establishing and significant further investment in our Each function has clear reporting lines maintaining adequate internal control Internal Controls capabilities. through to the Executive Management over financial reporting. The process of Team and the CEO. Functions report to In order to support our Sarbanes Oxley internal control over financial reporting is the Board committees, as previously program, we established a Group Steering designed to provide reasonable assurance described, based on the responsibilities of Committee comprising members of the regarding the reliability of financial each committee. For instance, the Chief Executive Team and other senior reporting and the preparation of financial Ethics and Compliance Officer reports management in order to oversee the statements for external reporting directly to the relevant Board committee program, evaluate the findings of purposes in conformity with International with a dotted-line report to the CEO. management testing and ensure the Financial Reporting Standards. Due to its availability of appropriate resources. inherent limitations, internal controls over In addition, the Group has a dedicated financial reporting may not prevent or Internal Audit function to provide Monitoring Systems detect misstatements. independent assurance over all Aligned with our Sarbanes-Oxley businesses and corporate functions program, we implemented a program of In May 2019, the Company completed its through a program of risk-based internal management testing of key financial acquisition of 100 percent of the shares of audits. Internal Audit reports to the Audit controls. Eight management testing Telefonía Celular de Nicaragua, S.A. In Committee of the Board with a dotted cycles were run during the year for our August 2019, Cable Onda S.A. acquired 100 line to Executive Management. This largest markets covering both business percent of the shares of Telefonica Moviles function identifies areas for improvement, processes and IT general controls. The Panama, S.A. The Company is engaged in assigns management actions, and results, including remediation actions refining and harmonizing the internal monitors implementation progress. where required, were reported and controls and processes of the acquired discussed with the Executive businesses with those of the Company. Business Control management, the Sarbanes-Oxley The Board is responsible for the Group’s Management has assessed the Steering Committee and with the Audit system of internal control, which is effectiveness of internal control over Committee. designed to manage, rather than financial reporting as of December 31, eliminate, the risk of failure to achieve We also invested in a new Governance, 2019 and concluded that it was business objectives. This system can Risk and Compliance (“GRC”) tool to effective. The foregoing assessment only provide reasonable, but not manage and monitor internal control does not constitute and is not meant to absolute, assurance against material compliance and reporting. The scope be an assessment of Millicom’s internal misstatement or loss. The concept of of the GRC tool will be expanded in control over financial reporting for reasonable assurance recognizes that 2020 to other assurance functions. purposes of the U.S. Securities the cost of control procedures should Exchange Act of 1934, as amended. We also have an established process of not exceed the expected benefits. internal control self-assessment which Risk Management Responsibility for maintaining effective requires self-certification of the design The risk function identifies, analyzes, internal controls is delegated to the CEO and operation of key controls. Self- measures, and monitors Millicom’s risks. and the Executive Team with oversight certified responses are then subject to The Chief Risk Officer is responsible for provided by the Audit Committee. The review and challenge by the Group providing risk owners at the central Executive Team are supported by a Business Controls team and Global functional and country levels with a dedicated Business Control team Process Owners. We use internal control methodology and tools needed to responsible for the Internal Control self-assessment for our smaller markets, balance risk with return. A Management framework. Each country also has its excluding those acquired during the Risk Committee, comprising members of own dedicated, local Business Control year, which are not directly within the Executive Team and functions team responsible for monitoring and Sarbanes-Oxley scope. responsible for key risk meets on a development of the local internal regular basis to provide oversight on the Fraud Management and Reporting control environment. evolution of risk and the approach taken Business Control is responsible for fraud to manage risk. The Chief Risk Officer Millicom continued investing significantly risk management. We continued our also reports to the Executive Team and in 2019 to further strengthen its internal education activities, including an the Audit Committee. The Audit control framework in particular in relation awareness campaign aligned with Committee, on behalf of the Board, to controls over financial reporting to International Fraud Awareness Week in oversees risk management activities. prepare for the first Sarbanes-Oxley November 2019.

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Our risk assessment processes, and the incentives and rewards include reports directly to the CEO and is principal risks managed by the Group compliance goals and clear accountable for delivering updates on the are set out in the Risk Management performance KPIs are built into the CR strategy to the Board. We also report section of this annual report. remuneration package of our General progress on CR strategy implementation Managers in each operation. and issues management to the Executive Ethics and Compliance Team on a monthly basis, either through Our Corporate Ethics & Compliance Speak Up Policy and Issue the EVP Chief External Affairs Officer or Program is central to our business Management directly in specific cases. strategy and is effectively embedded in Continuing with our compliance education the business processes and procedures. program, we reinforced our Speak Up Health, Safety & Environment Our program integrates preventive Policy and launched a new Ethics Line Integrated Services measures, key controls, reporting Campaign. The Executive Team and the The global Integrated Services (“IS”) mechanisms and due diligence Compliance & Business Conduct team continues to develop and mature processes capable of detecting and Committee of the Board received regular its compliance and risk mitigation correcting misconduct and wrongdoing. updates on cases raised through the Ethics controls. Country-specific IS teams We measure the actual impact of this Line or through other channels. have transitioned well throughout the program on our employees, customers, year from the previous OHSAS 18001 stakeholders, and communities in the Corporate Responsibility health and safety standard to the new countries where we operate. This is the fourth year that Millicom has international ISO 45001 standard. integrated corporate responsibility-related Millicom agreed to complete the Our Ethics and Compliance function performance data and information into transition within a two-year period, consists of global resources responsible our annual report to demonstrate how although we are allowed 3 years to for the Group’s Anti-Corruption, managing responsible growth and key switch between certifications. To date, Anti-Money Laundering, and risks support the successful delivery of our operations across Africa and Central Information Security Programs, as well business strategy. America have not only transitioned but as having a Compliance Officer in each also achieved certification to the new market. Millicom’s Corporate Responsibility (“CR”) standard. This is a remarkable result for team sets CR strategy, drives best-in-class the local countries and Millicom. Management and Governance of policies and processes for CR governance, The remainder of our Latin American Compliance Activities guides and coordinates CR performance Millicom has set the goal of building a operations along with the Group, across business functions, and publishes strong corporate culture that seeks completed the gap analysis and CR-related performance data and compliance excellence; and in which certification reviews during Q4 2019. We information in the annual report. Our employees at all levels are committed expect to have all country operations integrated report continues to promote to doing what is right and upholding certified by the end of Q2 2020. transparency towards investors and other the Company’s values and standards. key stakeholders on CR risks and IS oversees the implementation of To measure progress, our Great Places opportunities. policy and Group standards in health, to Work (“GPTW”) annual survey now safety and environment as well as includes questions to evaluate the The CR team constantly engages with facilities management, fleet culture of compliance in the Company. internal and external stakeholders to ensure management, and fuel and energy Millicom has used the GPTW survey Millicom understands and addresses CR resources. Teams responded quickly and with all employees to measure our issues that are important to our business professionally to several major incidents workplace culture since 2015. We and relevant to our stakeholders. and events during 2019, including the enhanced Ethics and Compliance successful evacuation of staff and Stakeholder engagement occurs through knowledge through consolidated families during a cyclone in Tanzania. a biennial materiality analysis and training provided in English and Spanish. Teams also provide effective and through ongoing interaction with our key All employees receive mandatory efficient solutions to support the Group stakeholders. In addition to anticipating training on the Code of Conduct, Carbon Disclosure Program (“CDP”) and and better preparing for risks, the CR Anti-Corruption, and AML policies in environmental energy efficiency plan. function also adds value by seeking order to reinforce the most important responsible leadership opportunities to Throughout 2019 we prevented any compliance concepts, influence assess where the Group can make the employee fatalities or major losses to employee behavior and prevent greatest positive impact on society, the the Group. Unfortunately there were 6 misconduct through practice examples. environment and to our business. fatalities in our contracted services. Our Compliance Communication Plan for Corporate Responsibility Governance In September 2019, Millicom hired a 2019 included weekly newsletters that The Board oversees the Government Chief Security and Crisis Management highlighted latest corporate enforcement Relations, Regulatory Affairs and CR Officer to oversee physical security, asset actions, lessons learned, monthly functions, which fall under the umbrella of protection and crisis management. We campaigns on various compliance External Affairs. This structure signifies created this role to prepare for our policies, and the celebration of the annual the depth and materiality of these topics increased footprint in the Latin American Corporate & Ethics Compliance Week in and the importance of monitoring their region through acquisitions of the November 2019. interconnected risks and opportunities. Telefonica and Cable Onda businesses as well as to establish a clear distinction Aligned with our motto, The Director of Corporate Responsibility between the health and safety and #IntegrityStartsWithYou, and for the reports to the Executive Vice President information security management roles. second year in a row, executive financial (“EVP”) Chief External Affairs Officer, who The Chief Security and Crisis

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How CR is governed

Role Board of Directors As part of the External Affairs function, CR oversees, advises and makes recommendations to Management regarding our CR strategies and activities. Chief Executive Officer

Executive Management Team EVP sponsors for managing CR EVP Chief Ethics and Direct reports Chief Technology Chief External Compliance Officer to the CEO and Information Affairs Officer Officer

Senior management Corporate Corporate Corporate Responsibility, Corporate Vice President Anti-Money Information Sustainability and Environmental Compliance Supply Chain Laundering Security Responsible for: Corporate Security & Crisis Responsible supply Management chain management

Management Officer leads our global every relevant operational threat in a program and reports to the EVP Chief Crisis Management Team and reports to formal risk mitigation plan. Ethics & Compliance Officer. The CISO is the Chief External Affairs Officer. responsible for identifying, managing Millicom crisis management defines the and mitigating technology-centric risks The Vice President of Compliance proper response to, and management Strategic Response oversees the IS of, an intense, unexpected, and throughout the entire company. team and reports to the EVP Chief unstable situation that disrupts normal The CISO oversees regional information Ethics & Compliance Officer. operations and has highly undesirable security teams to ensure the outcomes that require extraordinary Business Continuity and Crisis confidentiality, integrity, and availability measures to restore normal operations. Management of all business-critical systems and assets. Crisis management aims to protect the We designed our global and operational Other responsibilities include identifying safety of our staff and our reputation, business continuity and crisis potentially detrimental threats and risks together with continuous and reliable management system to address any and safeguarding proprietary and delivery of service to customers, while significant disruption that might affect personal customer information. also maintaining contractual, legal, and critical day-to-day activities. This Additionally, the regional teams work regulatory compliance. system continues to mature but has closely with Millicom business and already responded to events such as In parallel, Millicom has physical technology leaders to ensure compliance extreme weather, civil unrest, and security and loss prevention standards with corporate policies and regional criminal and political activities in some that set minimum acceptable levels of information security-related regulatory of the countries where we operate. critical site protection, as defined by requirements within the various countries industry best practice. All activities where we conduct business. Risk assessment is a continuous process undergo monitoring and compliance that starts with a business impact The CISO meets regularly with the activities. analysis of all critical services and Compliance and Business Conduct business processes that require a Information Security Committee and Audit Committee to disaster recovery and business At Millicom, our Global Chief ensure appropriate risks are elevated and continuity plan. After performing a risk Information Security Officer (“CISO”) addressed. assessment on all critical assets manages the information security identified in the analysis, we address

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Over the past year, the following critical • Development of a a Global Security better insight into the technical initiatives were undertaken: Operations Center (GSOC): During security risks of the company. We 2019, all operations moved to a completed our roll-out of the • Formalization of the Global consolidated, centralizing security program in Q3 2019. Information Security Office (“GISO”): operations center. The Millicom This office is charged with strategy, • Development of a Global Identity Information Security teams tactics, and oversight of all security and Access Management program: integrated business-critical efforts with the broader Millicom In order to effectively manage user environments to be monitored environment. The GISO is divided up access, especially with respect to U.S. around the clock by the GSOC, with into four critical pillars: Risk regulatory requirements, we have alerts being delivered in a near centralized all business and critical Management, Security Engineering, real-time manner. The teams are access provisioning into a central Vulnerability Management, and the focused on continuing the solution. Phase one of this effort Global Security Operations Center migration over the upcoming year, addressed all regulatory (“GSOC”). Lead by the CISO, the GISO with a goal to have all identified requirements by the end of Q3 2019 strategy, budget, and activities are environments fully monitored by and the remaining deployment overseen by the Millicom Information year-end. Security Steering Committee. This schedule will continue through committee comprises various • Development of a Global mid-2020. Millicom executives, technical Vulnerability Management program: resources, and business personnel Due to differences in maturity levels who meet monthly to discuss around operational security, the projects, approaches, and global program will identify, report, engagement across the company. and track risks and vulnerabilities within all operations to provide a

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Directors’ Financial and Share Capital Financial Risk Management At December 31, 2019, Millicom had Objectives and Policies Operating Report 101.7 million issued and paid up Millicom’s financial risk management Group Performance common shares of par value $1.50 policies and objectives, together with a In 2019, total revenue for the Group each, of which 580 thousand were held description of the various risks and was $4,336 million, and gross profit was by the Company as treasury shares hedging activities undertaken by the $3,135 million, a margin of 72.3 percent. (2018: 914 Thousand). During the year, Group, are set out in Section D, financial the company acquired approximately risk management, of the consolidated Operating expenses represented 37% 132 thousand shares and issued around financial statements. of revenue, a decrease compared to last 465 thousand shares to management Internal controls and risk management year, mainly due to the adoption of and employees under the LTIP on the preparation of the consolidated IFRS 16 ‘Leases’ which reduced remuneration plans and approximately financial statements are covered in the operating expenses by $149 million, 19 thousand shares to Directors as part Governance section from pages 57–91. partially offset by the additions of our of their annual remuneration. acquisitions in Panama and Nicaragua. Non-Financial Information Distribution to Shareholders and Non-financial information, such as Our operating profit amounted to Proposed Distributions $575 million, a 13.3 percent margin environmental, social, human rights, On May 2, 2019, at the Annual General impacted negatively mainly by lower and the fight against corruption, are Meeting of shareholders, a dividend gain on tower deals in El Salvador, integrated throughout this report, and distribution of $2.64 per share was Colombia, and Paraguay , higher in the Appendix. approved, and subsequently paid to amortization expenses due to shareholders in equal portions in May Management and Employees acquisitions, as well as the impact of and November. Over recent years, the Group has IFRS 16 additional depreciation developed many key functions and expense of $124 million. On February 24, 2020, Millicom’s Board improved support to local operations, approved to the Annual General Net financial expenses were including in the areas of procurement, Meeting of the shareholders a share $544 million, higher by $198 million network development, marketing, IT, buyback program to repurchase at least compared to last year mainly due to HR, compliance, and finance. $500 million over the next three years. higher levels of gross debt to fund The current shareholder authorization, At December 31, 2019, the Group’s recent acquisitions, and from the which expires on May 5, 2020, allows headcount from continuing operations impact of IFRS 16. for the repurchase of up to 5% of the reached approximately 22,000, up from Profit before taxes at $218 million outstanding share capital. In addition, around 21,000 at December 31, 2018, included the effects of the decrease in the Board approved to the Annual the increase being mainly related to the operating profit and interest expense General Meeting of the shareholders a acquisitions in Panama and Nicaragua. described above, but positively affected dividend distribution of $1.00 per share Outlook for the Group by an increase in value of our equity to be paid in 2020. The Annual General Although many of the macroeconomic investment in Helios Towers. Meeting to vote these matters is and competitive challenges we faced in scheduled to May 5, 2020. The Group net tax charge in 2019 was 2019 may continue to impact our $120 million, leaving a net gain for the On February 25, 2020, Millicom performance in the near term, we year from continuing operations at announced a three year $500 million continue to invest to capture the long $97 million. The gain of $57 million share repurchase plan and on 28th term growth opportunity before us. In from discontinued operations mainly February 2020 it initiated the first 2020, we expect to make meaningful reflected the disposal of our business in phase of this program comprising the progress toward our medium term goal Chad. purchase of not more than 350,000 to deliver mid-single-digit organic shares and not more than a maximum service revenue growth, mid-to-high As a result, the net profit for the year total amount of SEK 107 million single-digit organic EBITDA growth, and was $154 million. The share of gains of (approximately $11 million). The around 10% OCF (EBITDA less Capex) non-controlling interests was $5 million purpose of the repurchase program is to organic growth for the Latam segment. reflecting our partners’ share of net reduce Millicom’s share capital , or to results in our subsidiaries in Colombia use the repurchased shares for meeting and Panama. obligations arising under Millicom´s The net profit for the year attributable employee share based incentive to Millicom owners was $149 million. programs. The repurchase program may Earnings per share was $1.48. take place during the period between February 28, 2020 and May 5, 2020. Payment for the shares will be made in cash.

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Statements included in this report that Risks and Uncertainty Factors Management Responsibility are not historical facts, including The Group operates in an industry and Statement without limitation outlook, statements in markets which are characterized by We, Mauricio Ramos, Chief Executive concerning future strategy, plans, rapid change and subject to Officer, and Tim Pennington, Chief objectives, expectations and intentions, macroeconomic, competitive and Financial Officer, confirm, to the best of projected financial results, liquidity, political uncertainty. This change our knowledge, that these 2019 growth and prospects, are forward- creates both opportunities and at the consolidated financial statements looking statements. Such forward- same time a degree of risk. Many of the which have been prepared in looking statements involve a number of inherent underlying risks in these accordance with the International risks and uncertainties and are subject markets, including regulatory change Financial Reporting Standards as to change at any time. In the event such (including tariff controls and taxation), adopted by the European Union, give a risks or uncertainties materialize, currency fluctuations, and underlying true and fair view of the assets, Millicom’s results could be materially macroeconomic conditions, impact on liabilities, financial position, and profit adversely affected. Additional the level of disposable income and information on these and other key risks consumers’ attitudes and demand for or loss of the Millicom Group and the faced by the Group are set out in the our products and services. undertakings included in the Risk Management section on pages consolidation taken as a whole, and Subsequent Event 22–25. A further list and description of that the Directors’ report includes a fair On January 28, 2020, Millicom’s risks, uncertainties and other matters review of the development and wholly-owned subsidiary Telefónica can be found in Millicom’s Annual performance of the business and the Celular del Paraguay S.A.E (“Telecel”), Report on Form 20-F, including those position of the Millicom Group and the closed a $250 million re-tap to its senior outlined in “Item 3. Key undertakings included in the unsecured notes due 2027, representing Information—D. Risk Factors,” and in consolidation taken as a whole, an additional issuance of Telecel’s Millicom’s subsequent U.S. Securities together with a description of the outstanding $300 million 5.875% and Exchange Commission filings, all of principal risks and uncertainties that Senior Notes due 2027 issued on April 5, which are available at www.sec.gov. they face. 2019. The New notes will be treated as All forward-looking statements a single class with the Initial Notes, and Luxembourg, February 28, 2020 attributable to us or any person acting they were priced at 106.375 for an on our behalf are expressly qualified in implied yield to maturity of 4.817%. their entirety by this cautionary Mauricio Ramos statement. Readers are cautioned not José Antonio Ríos García Chief Executive Officer to place undue reliance on these Chairman of the Board of Directors forwardlooking statements that speak Luxembourg, February 28, 2020 Tim Pennington only as of the date hereof. Except to the Chief Financial Officer extent otherwise required by applicable law, we do not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

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Disclaimer and Non-IFRS Reconciliations

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Disclaimer

Forward-Looking Statements Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations and intentions, projected financial results, liquidity, growth and prospects, are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Millicom’s results could be materially adversely affected. The risks and uncertainties include, but are not limited to, the following: • global economic conditions and • relationships with key suppliers and A further list and description of risks, foreign exchange rate fluctuations as costs of handsets and other uncertainties and other matters can be well as local economic conditions in equipment; found in Millicom’s Registration the markets we serve; Statement on Form 20-F, including • our ability to successfully pursue those risks outlined in “Item 3. Key • telecommunications usage levels, acquisitions, investments or merger Information—D. Risk Factors,” and in including traffic and customer opportunities, integrate any Millicom’s subsequent U.S. Securities growth; acquired businesses in a timely and and Exchange Commission filings, all of cost-effective manner and achieve • competitive forces, including pricing which are available at www.sec.gov. the expected benefits of such pressures, the ability to connect to transactions; All forward-looking statements other operators’ networks and our attributable to us or any person acting ability to retain market share in the • the availability, terms and use of on our behalf are expressly qualified in face of competition from existing capital, the impact of regulatory and their entirety by this cautionary and new market entrants as well as competitive developments on statement. Readers are cautioned not industry consolidation; capital outlays, the ability to achieve to place undue reliance on these cost savings and realize productivity • legal or regulatory developments and forward-looking statements that speak improvements; changes, or changes in governmental only as of the date hereof. Except to the policy, including with respect to the • technological development and extent otherwise required by applicable availability of spectrum and licenses, evolving industry standards, law, we do not undertake any obligation the level of tariffs, tax matters, the including challenges in meeting to update or revise forward-looking terms of interconnection, customer customer demand for new statements, whether as a result of new access and international settlement technology and the cost of information, future events or otherwise. arrangements; upgrading existing infrastructure; • adverse legal or regulatory disputes • the capacity to upstream cash or proceedings; generated in operations through dividends, royalties, management • the success of our business, operating fees and repayment of shareholder and financing initiatives and loans; and strategies, including partnerships and capital expenditure plans; • other factors or trends affecting our financial condition or results of • the level and timing of the growth operations. and profitability of new initiatives, start-up costs associated with entering new markets, the successful deployment of new systems and applications to support new initiatives;

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Non-IFRS Reconciliations–continued

Non IFRS Measures Financial Measure Descriptions Proportionate leverage to EBITDA is the This report contains financial measures ratio of proportionate net debt over Service revenue is revenue related to not prepared in accordance with IFRS. LTM proportionate EBITDA, proforma the provision of ongoing services such These measures are referred to as for acquisitions made during the last as monthly subscription fees, airtime “non-IFRS” measures and include: twelve months. and data usage fees, interconnection non-IFRS service revenue, non-IFRS fees, roaming fees, mobile finance Capex is balance sheet capital EBITDA, and non-IFRS Capex, among service commissions and fees from expenditure excluding spectrum and others defined below. Annual growth other telecommunications services license costs and finance lease rates for these non-IFRS measures are such as data services, short message capitalizations from tower sale and often expressed in organic constant services and other value-added leaseback transactions. currency terms to exclude the effect of services excluding telephone and changes in foreign exchange rates, the Cash Capex represents the cash spent in equipment sales. adoption of new accounting standards relation to capital expenditure, such as IFRS 16, and are proforma for EBITDA is operating profit excluding excluding spectrum and licenses costs material changes in perimeter due to impairment losses, depreciation and and lease capitalizations from tower acquisitions and divestitures. The amortization, and gains/losses on fixed sale and leaseback transactions. non-IFRS financial measures are asset disposals. Operating Cash Flow (OCF) is EBITDA presented in this press release as Proportionate EBITDA is the sum of the less Capex. Millicom’s management believes they EBITDA in every country where Millicom provide investors with an additional Operating Free Cash Flow is OCF less operates, including its Guatemala and information for the analysis of changes in working capital and other Honduras joint ventures, pro rata for Millicom’s results of operations, non-cash items and taxes paid. Millicom’s ownership stake in each particularly in evaluating performance country, less corporate costs that are Equity Free Cash Flow is Operating Free from one period to another. Millicom’s not allocated to any country and Cash Flow less finance charges paid management uses non-IFRS financial inter-company eliminations. (net), less advances for dividends to measures to make operating decisions, non-controlling interests, plus dividends as they facilitate additional internal Organic growth represents year-on-year received from joint ventures. comparisons of Millicom’s performance growth excluding the impact of to historical results and to competitors’ changes in FX rates, perimeter, and Operating Profit After Tax displays the results, and provides them to investors accounting. Changes in perimeter are profit generated from the operations of as a supplement to Millicom’s reported the result of acquisitions and the company after statutory taxes. results to provide additional insight into divestitures. Results from divested Return on Invested Capital (ROIC)* is Millicom’s operating performance. assets are immediately removed from used to assess the Group’s efficiency at Millicom’s Remuneration Committee both periods, whereas the results from allocating the capital under its control uses certain non-IFRS measures when acquired assets are included in both to and is defined as Operating Profit assessing the performance and periods at the beginning (January 1) of After Tax, including Guatemala and compensation of employees, including the first full calendar year of ownership. Honduras as if fully consolidated, Millicom’s executive directors. Net debt is Gross debt less cash and divided by the average invested Capital The non-IFRS financial measures used pledged and term deposits. during the period. by Millicom may be calculated Net financial obligations is Net debt Average Invested Capital* is the capital differently from, and therefore may not plus lease obligations. invested in the company operation be comparable to, similarly titled throughout the year and is calculated measures used by other companies - Proportionate net financial obligations with the average of opening and refer to the section “Non-IFRS Financial is the sum of the net financial closing balances of the total assets Measure Descriptions” for additional obligations in every country where minus current liabilities (excluding debt, information. In addition, these Millicom operates, including its joint ventures, accrued interests, non-IFRS measures should not be Guatemala and Honduras joint deferred and current tax, cash as well as considered in isolation as a substitute ventures, pro rata for Millicom’s investments and non-controlling for, or as superior to, financial measures ownership stake in each country. interests), less assets and liabilities held calculated in accordance with IFRS, and Leverage is the ratio of net financial for sale. Millicom’s financial results calculated in obligations over LTM (last twelve accordance with IFRS and Underlying measures, such as month) EBITDA, proforma for reconciliations to those financial Underlying service revenue, Underlying acquisitions made during the last statements should be carefully EBITDA, Underlying equity free cash twelve months. evaluated. flow, Underlying net debt, etc, include Guatemala and Honduras, as if fully consolidated.

*This non-IFRS measure is not used in this annual report as this is not directly reconcilable with IFRS measures.

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Non-IFRS Reconciliations

Reconciliation from Reported Growth to Organic Growth for the Latam and Africa segmentsi

Revenue Service Revenue EBITDA OCF

Latam Segment ($ millions) FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 A- Current period 5,964 5,485 5,514 5,069 2,443 2,077 1,442 1,124 B- Prior year period 5,485 5,441 5,069 5,078 2,077 2,022 1,124 1,116 C- Reported growth (A/B) 8.7% 0.8% 8.8% (0.2)% 17.6% 2.7% 28.3% 0.7% D- Accounting change impact — 2.4% 0.0% 1.0% 8.2% 0.8% 16.5% 1.4% E- Change in Perimeter impact 11.0% — 11.6% — 11.9% — 11.2% — F- FX impact (5.2)% (5.1)% (5.2)% (5.3)% (5.0)% (1.1)% (9.2)% (3.1)% G- Other 0.1% (0.1)% 0.1% (0.2)% 0.4% (0.4)% 1.5% (0.7)% F- Organic Growth (C-D-E-F-G) 2.8% 3.5% 2.2% 4.3% 2.1% 3.5% 8.3% 3.2% iPlease refer to Note 5 of our Unaudited Interim Condensed Consolidated Financial Statements for more details on our segments.

Revenue Service Revenue EBITDA

Africa Segment ($ millions) FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 A- Current period 382 399 382 398 122 102 B- Prior year period 399 385 398 385 102 98 C- Reported growth (A/B) (4.2)% 3.5% (4.2)% 3.5% 19.4% 4.3% D- Accounting change impact — (0.2)% — (0.2)% 33.8% (0.4)% E- Change in Perimeter impact — — — — — — F- FX impact (1.4)% (1.7)% (1.4)% (1.7)% (1.8)% (0.9)% G- Other 0.1% (0.4)% 0.1% (0.4)% 7.3% (2.1)% F- Organic Growth (C-D-E-F-G) (2.9)% 5.7% (2.9)% 5.8% (19.9)% 7.7%

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Non-IFRS Reconciliations–continued

Reconciliation from Reported Growth to Organic Growth for the main Latam markets

Service Revenue ($ millions) FY 2019 FY2018 Organic FX Perimeter Other Reported Guatemala 1,234 1,200 5.3% -2.5% — — 2.8% Colombia 1,432 1,553 2.8% -10.5% — -0.2% -7.8% Paraguay 575 632 -1.2% -7.9% — — -9.0% Honduras 551 555 1.7% -2.5% — — -0.8% Bolivia 624 597 4.5% — — — 4.5% Panama 468 17 0.4% — NM 9.8% NM El Salvador 348 371 -6.2% — — — -6.2% Nicaragua, Costa Rica, Eliminations & 284 145 NM NM NM NM NM Corporate Costs Latam* 5,514 5,069 2.2% -5.2% 11.6% 0.1% 8.8%

*Perimeter impact on Latam segment reflects acquisition of Cable Onda and using service revenue as reported by the company to the Panama Stock Exchange. Panama performance in 2018 reflects only the results of the last two weeks of the month of December 2018.

EBITDA ($ millions) FY 2019 FY 2018 Organic FX Accounting Perimeter Other Reported Guatemala 748 689 4.7% -2.5% 6.4% — — 8.6% Colombia 510 494 3.0% -10.4% 10.8% — -0.2% 3.2% Paraguay 294 332 -5.6% -7.7% 1.7% — 0.2% -11.5% Honduras 280 268 0.5% -2.4% 6 .1% — — 4.2% Bolivia 257 232 6.3% — 4.7% — — 11.0% Panama 223 4 9.1% — NM NM NM NM El Salvador 140 133 -4.4% — 9.5% — — 5.1% Nicaragua, Costa -8 -75 NM NM NM NM NM NM Rica, Eliminations & Corporate Costs Latam* 2,443 2,077 2.1% -5.0% 8.2% 11.9% 0.4% 17.6%

*Perimeter impact on Latam segment reflects acquisition of Cable Onda and using EBITDA as reported by the company to the Panama Stock Exchange.Panama performance in Q4 2018 reflects only the results of the last two weeks of the month of December 2018.

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Non-IFRS Reconciliations–continued

ARPU reconciliations

Latam Segment Mobile ARPU Reconciliation 2019 2018 Mobile service revenue ($m) 3,258 3,214 Mobile Service revenue ($m) from non Tigo customers ($m)* (65) (58) Mobile Service revenue ($m) from Tigo customers (A) 3,192 3,156 Mobile customers–end of period (000) 39,846 33,691 Mobile customers–average (000) (B)** 36,636 33,186 Mobile ARPU (USD/Month) (A/B/number of months) 7.3 7.9

*Refers to TV advertising, production services, MVNO, DVNO, equipment rental revenue, call center revenue, national roaming, equipment sales, visitor roaming, tower rental, DVNE, and other non-customer driven revenue. **Average of the last five quarters.

Latam Home ARPU Reconciliation 2019 2018 Home service revenue ($m) 1,530 1,244 Home service revenue ($m) from non Tigo customers ($m)* (40) (33) Home service revenue ($m) from Tigo customers 1,490 1,210 Customer Relationships–end of period (000)** 4,341 4,118 Customer Relationships–average (000)*** 4,242 3,587 Home ARPU (USD/Month) (A/B/12) 29.3 28.1

*TV advertising, production services, equipment rental revenue, call center revenue, equipment sales and other non customer driven revenue. **Represented by homes connected all techonologies (HFC + Other Technologies + DTH & Wimax RGUs). ***Average of the last five quarters. ****2019 includes Panama Cable Onda.

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Non-IFRS Reconciliations–continued

Foreign Exchange rates used to support FX impact calculations in the above Organic Growth reconciliations

Average FX rate (vs. USD) End of period FX rate (vs. USD)

Q4 19 Q4 18 YoY Q4 19 Q4 18 YoY

Bolivia BOB 6.91 6.91 0.0% 6.91 6.91 0.0% Colombia COP 3,413 3,166 (7.2)% 3,277 3,250 (0.8)% Costa Rica CRC 578 599 3.7% 576 608 5.6% Guatemala GTQ 7.71 7.72 0.1% 7.70 7.74 0.5% Honduras HNL 24.72 24.29 (1.7)% 24.72 24.42 (1.2)% Nicaragua NIO 33.70 33.12 (1.7)% 33.84 32.33 (4.5)% Paraguay PYG 6,434 5,946 (7.6)% 6,453 5,961 (7.6)% Chad XAF 588 588 (0.1)% 588 580 (1.4)% Ghana GHS 5.53 4.85 (12.3)% 5.73 4.82 (15.9)% Tanzania TZS 2,297 2,294 (0.1)% 2,299 2,299 0.0%

Reconciliation Net debt to EBITDA to Proportionate net debt to EBITDA as of December 31, 2019 and December 31, 2018

Debt Information - December 31, 2019

Proforma Proforma $ millions Gross Debt Cash Net Debt EBITDA Adjustments* EBITDA Leverage Millicom Group (IFRS) 7,036 1,166 5,870 1,530 — — — Plus: Guatamala 1,172 189 983 748 — — — Plus: Honduras 423 40 383 280 — — — Less: Corporate Costs — — — (36) — — — Underlying Millicom Group 8,631 1,395 7,236 2,522 95 2,617 2.76x (Non-IFRS) Less: 50% Minority Stake (606) (107) (499) (255) — — — in Colombia Less: 45% Minority Stake (528) (85) (442) (337) — — — in Guatemala Less: 33% Minority Stake (141) (13) (128) (93) — — — in Honduras Less: 20% Minority Stake (201) (12) (189) (45) (13) — — in Panama Less: 1.5% Minority Stake (6) — (6) (2) — — — in Tanzania Proportionate Millicom Group 7,149 1,177 5,973 1,791 82 1,873 3.19x (Non-IFRS)

* Proforma adjusted EBITDA related to mobile acquisitions in Nicaragua and Panama.

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Non-IFRS Reconciliations–continued

Debt Information–December 31, 2018

Proforma Proforma $ millions Gross Debt Cash Net Debt EBITDA Adjustments* EBITDA Leverage Millicom Group (IFRS) 4,580 529 4,051 1,254 — — — Plus: Guatamala 927 221 706 689 — — — Plus: Honduras 383 25 358 268 — — — Less: Corporate Costs — — — (35) — — — Underlying Millicom Group 5,890 775 5,116 2,176 166 2,342 2.18 (Non-IFRS) Less: 50% Minority Stake (508) (89) (419) (247) — — — in Colombia Less: 45% Minority Stake (417) (99) (318) (310) — — — in Guatemala Less: 33% Minority Stake (128) (8) (119) (89) — — — in Honduras Less: 20% Minority Stake (52) (1) (51) (1) (33) — — in Panama Less: 15% Minority Stake (13) (1) (12) (1) — — — in Zantel Proportionate Millicom Group 4,772 576 4,197 1,527 133 1,660 2.52 (Non-IFRS)

* Proforma adjusted EBITDA related to Cable Onda acquisition. EBITDA has not been adjusted for disposal of Chad.

Equity Free Cash Flow

Year ended December 31,

2019 2018 Net cash provided by operating activities 801 792 Purchase of property, plant and equipment (736) (632) Proceeds from sale of property, plant and equipment 24 154 Proceeds from sale of towers part of tower sale and leaseback transactions (22) (142) Purchase of intangible assets (171) (148) Proceeds from sale of intangible assets — — Purchase of spectrum and licenses 59 61 Finance charges paid, net 470 298 Operating free cash flow 425 383 Interest (paid), net (470) (298) Free cash flow (45) 85 Dividends received from joint ventures (Guatemala and Honduras) 237 243 Dividends paid to non-controlling interests (13) (2) Equity free cash flow 179 326

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Non-IFRS Reconciliations–continued

Fully consolidated P&L reconciliation for IFRS 16 implementation (unaudited)

IFRS16 FY 2019 before ($millions) FY 2019 Impact IFRS 16 FY 2018 % change Revenue 4,336 — 4,336 3,946 9.9% Cost of sales (1,201) — (1,201) (1,117) 7.5% Gross profit 3,135 — 3,135 2,829 10.8% Operating expenses (1,604) 148 (1,753) (1,616) 8.4% EBITDA 1,530 148 1,382 1,213 13.9% Depreciation (825) (109) (716) (662) 8 .1% Amortization (275) — (275) (140) 95.9% Share of net profit in Guatemala and Honduras 179 (6) 185 154 20.0% Other operating income (expenses), net (34) 1 (35) 75 NM Operating profit 575 35 540 640 (15.6)% Net financial expenses (544) (72) (472) (346) 36.3% Other non-operating income (expenses), net 227 (4) 231 (39) NM Gains (losses) from other JVs and associates, net (40) — (40) (136) (70.3)% Profit (loss) before tax 218 (41) 259 119 116.9% Net tax credit (charge) (120) — (121) (112) 7.6% Profit (loss) for the period from continuing ops. 97 (40) 138 7 NM Non-controlling interests (5) 5 (9) 16 NM Profit (loss) from discontinued operations 57 — 57 (33) NM Net profit (loss) for the period 149 (36) 185 (10) NM

IFRS 16 impact by country

FY 2019 EBITDA EBITDA FY 2019 Margin IFRS 16 FY 2019 FY 2019 IFRS 16 excluding EBITDA excluding impact on EBITDA ($ millions) Revenue EBITDA impact IFRS 16 Margin IFRS 16 margin Guatemala 1,434 748 44 704 52.2% 49.1% 3.1pt Colombia 1,532 510 53 457 33.3% 29.8% 3.5pt Paraguay 610 294 6 288 48.2% 47.2% 0.9pt Honduras 594 280 16 263 47.1% 44.4% 2.8pt Bolivia 639 257 11 246 40.2% 38.5% 1.7pt Panama 475 223 12 210 46.9% 44.3% 2.5pt El Salvador 387 140 13 128 36.2% 33.0% 3.3pt Nicaragua, Costa Rica, 293 (8) 16 (24) NM NM NM Eliminations & Corporate Costs Latam 5,964 2,443 171 2,273 41.0% 38.1% 2.9pt

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Non-IFRS Reconciliations–continued

Capex Reconciliation

Capex Reconciliation FY 2019 FY 2018 Consolidated: Additions to property, plant and equipment 719 698 Of which (finance) lease capitalizations from tower sale and leaseback transactions — 25 Additions to licenses and other intangibles 202 158 Of which spectrum and license costs 101 66 Total consolidated additions 921 856 Of which is capital expenditures related to the corporate offices 13 5

Latin America Segment FY 2019 FY 2018 Additions to property, plant and equipment 879 840 Of which (finance) lease capitalizations from tower sale and leaseback transactions — 22 Additions to licenses and other intangibles 240 200 Of which spectrum and license costs 117 64 Latin America Segment total additions (Underlying) 1,119 1,040 Capex excluding spectrum and lease capitalizations 1,002 954

Africa Segment FY 2019 FY 2018 Additions to property, plant and equipment 42 30 Of which (finance) lease capitalizations from tower sale and leaseback transactions — — Additions to licenses and other intangibles 12 — Of which spectrum and license costs 12 — Africa Segment total additions 54 30 Capex excluding spectrum and lease capitalizations 42 30

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Non-IFRS Reconciliations–continued

Operating Free Cash Flow Reconciliation

Cash Flow Data FY 2019 FY 2018 Net cash provided by operating activities 801 792 Purchase of property, plant and equipment (736) (632) Proceeds from sale of property, plant and equipment 24 154 Purchase of intangible assets and licenses (171) (148) Proceeds from sale of intangible assets — — Net purchase/proceeds for property, plant and equipment and intangible assets (882) (626) (Less) Proceeds from sale of towers part of tower sale and leaseback transactions (22) (142) (Less) Purchase of spectrum and licenses 59 61 (Less) Finance charges paid, net 470 298 Operating free cash flow 425 383

OCF (EBITDA- Capex) Reconciliation

Latam OCF Underlying FY 2019 FY 2018 Latam EBITDA 2,443 2,077 (–) Capex (Ex. Spectrum) 1,002 954 Latam OCF 1,442 1,124

Africa OCF FY 2019 FY 2018 Africa EBITDA 122 102 (–) Capex (Ex. Spectrum) 42 30 Africa OCF 80 72

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Non-IFRS Reconciliations–continued

Underlying financial information Until 2015, Millicom group results included Guatemala and Honduras on a 100% consolidation basis. Since 2016, these businesses are treated as joint ventures and are consolidated using the equity method. To aid investors to better track the evolution of the company’s performance over time, we provide the following indicative unaudited financial statement data for the Millicom group on an underlying basis which include our Guatemala and Honduras joint ventures as if they had been fully consolidated.

Guatemala Income statement data FY 2019 Millicom and Honduras Underlying ($millions) (IFRS) JVs Eliminations (non-IFRS) Revenue 4,336 2,009 — 6,345 Cost of sales (1,201) (469) — (1,670) Gross profit 3,135 1,540 — 4,675 Operating expenses (1,604) (549) — (2,153) EBITDA 1,530 992 — 2,522 EBITDA margin 35.3% 49.4% — 39.8% Depreciation & amortization (1,100) (444) — (1,544) Share of net profit in joint ventures 179 — (179) — Other operating income (expenses), net (34) (8) — (43) Operating profit 575 540 (179) 936 Net financial expenses (544) (102) — (647) Other non-operating income (expenses), net 227 (12) — 215 Gains (losses) from associates (40) — — (40) Profit (loss) before tax 218 426 (179) 464 Net tax credit (charge) (120) (100) — (220) Profit (loss) for the period 97 326 (179) 244 Profit (loss) from discontinued operations 57 — — 57 Non-controlling interests (5) (147) — (152) Net profit (loss) for the period 149 179 (179) 149

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Non-IFRS Reconciliations–continued

Guatemala and Honduras Underlying Balance Sheet data ($ millions) Millicom IFRS JVs (non-IFRS) ASSETS Intangible assets, net 3,219 2,851 6,069 Property, plant and equipment, net 2,883 929 3,811 Right of Use Assets 977 302 1,279 Investments in joint ventures and associates 2,822 (2,797) 25 Other non-current assets 310 172 482 TOTAL NON-CURRENT ASSETS 10,210 1,456 11,666 Inventories, net 32 38 70 Trade receivables, net 371 76 447 Other current assets 919 333 1,252 Restricted cash 155 14 169 Cash and cash equivalents 1,164 229 1,393 TOTAL CURRENT ASSETS 2,641 689 3,330 Assets held for sale 5 — 5 TOTAL ASSETS 12,856 2,145 15,001

EQUITY AND LIABILITIES Equity attributable to owners of the Company 2,410 (41) 2,369 Non-controlling interests 271 589 859 TOTAL EQUITY 2,680 548 3,228 Debt and financing 6,753 1,535 8,288 Other non-current liabilities 1,017 (188) 829 TOTAL NON-CURRENT LIABILITIES 7,770 1,347 9,117 Debt and financing 283 60 343 Other current liabilities 2,124 190 2,313 TOTAL CURRENT LIABILITIES 2,406 250 2,656 Liabilities directly associated with assets held for sale — — — TOTAL LIABILITIES 10,176 1,597 11,773 TOTAL EQUITY AND LIABILITIES 12,856 2,145 15,001

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Non-IFRS Reconciliations–continued

Guatemala Cash Flow Data–FY 2019 and Honduras Underlying ($millions) Millicom IFRS JVs (non-IFRS) Profit (loss) before taxes from continuing operations 218 247 464 Profit (loss) for the period from discontinued operations 59 — 59 Profit (loss) before taxes 276 247 523 Net cash provided by operating activities (incl. discontinued ops) 801 782 1,583 Net cash used in investing activities (incl. discontinued ops) (1,502) (544) (2,046) Net cash from (used by) financing activities (incl. discontinued ops) 1,355 (251) 1,104 Exchange impact on cash and cash equivalents, net (8) — (8) Net (decrease) increase in cash and cash equivalents 645 (12) 633 Cash and cash equivalents at the beginning of the period 528 241 769 Effect of cash in disposal group held for sale (9) — (9) Cash and cash equivalents at the end of the period 1,164 229 1,393

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Auditor’s Reports and Consolidated Financial Statements

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Independent auditor’s report To the Shareholders of Millicom International Cellular S.A. 2, rue du Fort Bourbon L-1249 Luxembourg

Report on the audit of the Accountants (IESBA Code) as adopted Our answer consolidated financial statements for Luxembourg by the CSSF together Our audit procedures over revenue with the ethical requirements that are Opinion included, among others: relevant to our audit of the We have audited the accompanying consolidated financial statements in • We tested the operating consolidated financial statements of Luxembourg, and we have fulfilled our effectiveness of controls over the Millicom International Cellular S.A. other ethical responsibilities under accounting for bundled offers and (“the Group”) included on page 120 to those ethical requirements. We believe principal vs. agent considerations. page 213, which comprise the that the audit evidence we have • We evaluated the design and tested consolidated statement of financial obtained is sufficient and appropriate the operating effectiveness of position as of December 31, 2019, the to provide a basis for our opinion. controls around access rights, system consolidated statement of income, the development, program changes and consolidated statement of Key audit matters IT dependent business controls to comprehensive income, the Key audit matters are those matters establish that changes to the system consolidated statement of cash flows that, in our professional judgment, were were appropriately authorized and the consolidated statement of of most significance in our audit of the developed and implemented changes in equity for the year then consolidated financial statements of including those over: set-up of ended, and a summary of significant the current period. These matters were customer accounts, pricing data, accounting policies and other addressed in the context of our audit of segregation of duties and the explanatory information. the consolidated financial statements linkage to usage data that drives In our opinion, the consolidated as a whole, and in forming our opinion revenue recognition financial statements give a true and fair thereon, and we do not provide a • We tested the end-to-end view of the financial position of separate opinion on these matters. reconciliation from the billing Millicom International Cellular S.A., as 1. Revenue recognition systems to the general ledger of December 31, 2019, and of its financial performance and its cash Risk identified • We tested journal entries processed flows for the year then ended in between the billing systems and The Group’s revenue consists of mobile accordance with International Financial general ledger. and data telephony services, corporate Reporting Standards as adopted by the solutions, fixed-line broadband, • We assessed the accounting for European Union. fixed-line telephone, cable TV and credits and discounts and tested the mobile financial services to retail and accuracy of customer invoices Basis for opinion business customers. • We assessed the assumptions used We conducted our audit in accordance Revenue from these services is by management to determine the with EU Regulation N° 537/2014, the Law considered a significant risk due to both allocation of the transaction price, of 23 July 2016 on the audit profession the bundling of these services and the after consideration of these credits (the “Law of 23 July 2016”) and with complexity of the Group’s systems and and discounts, to telecom services International Standards on Auditing processes used to record revenue. Also, and handsets and tested the (“ISAs”) as adopted for Luxembourg by the application of revenue recognition stand-alone selling prices the “Commission de Surveillance du accounting standards is complex and Secteur Financier” (“CSSF”). • We obtained a sample of customer involves a number of key judgments contracts, including modifications to Our responsibilities under those and estimates, especially in the light of the contracts, and compared Regulation, Law and standards are the IFRS 15 application. customer contract terms to the further described in the “Responsibilities revenue systems. of the “réviseur d’entreprises agréé” for the audit of the consolidated financial • We evaluated management’s statements“ section of our report. We Principal vs. Agent considerations are also independent of the Group in and conclusions. accordance with the International • We evaluated the adequacy of the Ethics Standards Board for Accountants’ Group’s disclosures included in Note Code of Ethics for Professional B.1.1. in relation to revenue recognition matters.

Millicom 2019 Annual Report 116 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Independent Auditor’s Report–continued

To the shareholders of Millicom International Cellular S.A.

2. Uncertain tax positions 3. Accounting for Business • We involved our valuation specialists Combinations to assist with our audit procedures to Risk identified test the estimated cash flows and Risk identified The Group’s operations are subject to management’s valuation income taxes in various jurisdictions The Group acquired control over, and methodologies and assumptions resulting in different subjective and therefore consolidated Cable Onda S.A. (e.g. such as the discount rate, churn complex interpretation of local tax laws (“Cable Onda”) in Panama for net rate and EBITDA margin) used to as uncertainty prevails in the emerging consideration of USD 956 million, determine the fair value of the market economies in which Millicom is Telefonica Celular de Nicaragua S.A. in acquired identifiable assets and operating. In addition, the global tax Nicaragua (“Telefonica Nicaragua”) for assumed liabilities. environment worldwide continues to net consideration of USD 430 million, • Our valuation specialists assessed evolve and becomes more complex. as adjusted, and Telefonica Moviles whether the underlying assumptions Management exercises judgment in Panama S.A. in Panama (“Telefonica used by the management were assessing the level of provision required Panama”) for net consideration of USD consistent with publicly available for taxation when such taxes are based 594 million as of December 13, 2018, information and external market on the interpretation of complex tax May 16, 2019 and August 29, 2019, data. laws. The future actual outcome of the respectively. These transactions were decisions concerning these tax accounted for as business • We evaluated the adequacy of the exposures may result in materially combinations. The purchase accounting related disclosures in Note A.1.2 to higher or lower amounts than the of Cable Onda was provisional as of the consolidated financial accrual included in the accompanying December 31, 2018 and had been statements. Consolidated Financial Statements. finalized as of December 31, 2019. 4. Adoption of IFRS 16, leases Management has determined the Our answer purchase accounting for Telefonica Risk Identified Nicaragua and Telefonica Panama on a Our procedures included, amongst The Group adopted IFRS 16, Leases, provisional basis as of December 31, others: using the modified retrospective 2019. The acquisitions are material, approach with the cumulative effect of • We tested the Group’s controls that complex and contains significant applying the new standard recognized address the risks of material judgment in relation to their purchase in retained profits as of January 1, 2019. misstatement relating to uncertain accounting. The Group, assisted by its At the transition date, the Group tax positions. external valuation specialists, recognized lease liabilities measured at determined the fair value of acquired • We evaluated the assumptions the the present value of the remaining entities identifiable assets and Group used to develop its uncertain lease payments, discounted using the liabilities, which included a number of tax positions and related lessee’s incremental borrowing rate as assumptions such as useful life of unrecognized income tax benefit of January 1, 2019. The right-of-use assets, customer churn and contingent amounts by jurisdiction. asset was measured at an amount liabilities. equal to the lease liability, adjusted by • We tested the completeness and the amount of any prepaid or accrued accuracy of the underlying data Our answer lease payments. Upon adoption, the used by the Group to calculate its Our audit procedures included, amongst Group recognized lease liabilities of US uncertain tax positions. others: 898 million and right-of-use assets of • We assessed the historical accuracy USD 856 million. The application of • We evaluated the design and testing of management’s estimates of its IFRS 16 effective from January 1, 2019 the operating effectiveness of unrecognized income tax benefits by was especially challenging and involved controls of the Group’s controls over comparing the estimates with the complex auditor judgment particularly its accounting for business resolution of those positions. regarding assessing management’s combinations. determination of a complete • We involved our tax professionals to • We inspected the purchase population of the Group’s leases, assist us in evaluating the agreements and evaluating the estimation and evaluation of the application of relevant tax laws in terms and conditions and incremental borrowing rates for each of the Group’s recognition management’s accounting for such the leases (including consideration of determination. terms and conditions in its purchase industry, country and credit risks) and • We evaluated the adequacy of the price allocation. Group’s disclosures included in Note G.3.2. in relation to these tax matters.

Millicom 2019 Annual Report 117 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Independent Auditor’s Report–continued

To the shareholders of Millicom International Cellular S.A.

estimation of the useful lives, including d’entreprises agréé” thereon. Responsibilities of the “réviseur consideration of renewal options. These d’entreprises agréé” for the audit of Our opinion on the consolidated assumptions have a significant effect the consolidated financial financial statements does not cover the on the right-of-use asset, on the lease statements other information and we do not liability and the depreciation and express any form of assurance The objectives of our audit are to obtain financing costs. conclusion thereon. reasonable assurance about whether the consolidated financial statements Our answer In connection with our audit of the as a whole are free from material consolidated financial statements, our Our audit procedures included, among misstatement, whether due to fraud or responsibility is to read the other others: error, and to issue a report of the information and, in doing so, consider “réviseur d’entreprises agréé” that • We evaluated the design and testing whether the other information is includes our opinion. Reasonable the operating effectiveness of materially inconsistent with the assurance is a high level of assurance, controls over the completeness and consolidated financial statements or but is not a guarantee that an audit accuracy of the Group’s lease our knowledge obtained in the audit or conducted in accordance with EU population, valuation and otherwise appears to be materially Regulation N° 537/2014, the Law of recognition of the right-of-use asset misstated. If, based on the work we 23 July 2016 and with the ISAs as and the lease liability and the have performed, we conclude that there adopted for Luxembourg by the CSSF Group’s determination of their is a material misstatement of this other will always detect a material underlying assumptions (including information, we are required to report misstatement when it exists. renewal assumptions and estimation this fact. We have nothing to report in Misstatements can arise from fraud or of the incremental borrowing rate). this regard. error and are considered material if, • We inspected a sample of the lease Responsibilities of the Board of individually or taken together, they agreements, including modifications Directors and of those charged with could reasonably be expected to and we assessed management’s governance for the consolidated influence the economic decisions of assumptions regarding lease renewal financial statements users taken on the basis of these periods including its determination consolidated financial statements. The Board of Directors is responsible for that it was highly probable that the the preparation and fair presentation of As part of an audit in accordance with leases would be renewed. the consolidated financial statements in EU Regulation N° 537/2014, the Law of • Regarding the incremental accordance with IFRSs as adopted by 23 July 2016 and with ISAs as adopted borrowing rates, we involved our the European Union, and for such for Luxembourg by the CSSF, we valuation specialists to assist with internal control as management exercise professional judgment and our audit procedures to test determines is necessary to enable the maintain professional skepticism management’s assumptions and risk preparation of consolidated financial throughout the audit. We also: considerations as described above statements that are free from • Identify and assess the risks of used in the measurement process. material misstatement, whether due material misstatement of the to fraud or error. • We also assessed the adequacy of consolidated financial statements, the Group’s disclosures in respect In preparing the consolidated financial whether due to fraud or error, design of the adoption of IFRS 16 as set out statements, the Board of Directors is and perform audit procedures in the Introduction and Notes C.4. to responsible for assessing the Group’s responsive to those risks, and obtain the consolidated financial ability to continue as a going concern, audit evidence that is sufficient and statements. disclosing, as applicable, matters appropriate to provide a basis for our related to going concern and using the opinion. The risk of not detecting a Other information going concern basis of accounting material misstatement resulting unless management either intends to from fraud is higher than for one The Board of Directors is responsible liquidate the Group or to cease resulting from error, as fraud may for the other information. The other operations, or has no realistic involve collusion, forgery, intentional information comprises the information alternative but to do so. omissions, misrepresentations, or the included in the consolidated override of internal control. management report on page 99 and the Those charged with governance are accompanying corporate governance responsible for overseeing the Group’s statement on pages 66 to 98 but does financial reporting process. not include the consolidated financial statements and our report of “réviseur

Millicom 2019 Annual Report 118 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Independent Auditor’s Report–continued

To the shareholders of Millicom International Cellular S.A.

• Obtain an understanding of internal We communicate with those charged We confirm that the audit opinion is control relevant to the audit in order with governance regarding, among consistent with the additional report to to design audit procedures that are other matters, the planned scope and the audit committee or equivalent. appropriate in the circumstances, timing of the audit and significant audit We confirm that the prohibited but not for the purpose of expressing findings, including any significant non-audit services referred to in EU an opinion on the effectiveness of deficiencies in internal control that we Regulation No 537/2014 were not the Group’s internal control. identify during our audit. provided and that we remained • Evaluate the appropriateness of We also provide those charged with independent of the Group in accounting policies used and the governance with a statement that we conducting the audit. reasonableness of accounting have complied with relevant ethical estimates and related disclosures requirements regarding independence, Other matter made by management. and to communicate with them all The corporate governance statement relationships and other matters that • Conclude on the appropriateness of includes the information required by may reasonably be thought to bear on management’s use of the going article 68ter paragraph (1) of the law of our independence, and where concern basis of accounting and, 19 December 2002 on the commercial applicable, related safeguards. based on the audit evidence and companies register and on the obtained, whether a material From the matters communicated with accounting records and annual uncertainty exists related to events those charged with governance, we accounts of undertakings, as amended. or conditions that may cast determine those matters that were of Ernst & Young significant doubt on the Group’s most significance in the audit of the ability to continue as a going consolidated financial statements of Société anonyme concern. If we conclude that a the current period and are therefore the Cabinet de révision agréé material uncertainty exists, we are key audit matters. We describe these required to draw attention in our matters in our auditor’s report unless report of the “réviseur d’entreprises law or regulation precludes public Bruno di Bartolomeo agréé” to the related disclosures in disclosure about the matter. Luxembourg February 28, 2020 the consolidated financial Report on other legal and regulatory statements or, if such disclosures are requirements inadequate, to modify our opinion. Our conclusions are based on the We have been appointed as “réviseur audit evidence obtained up to the d’entreprises agréé” by the General date of our auditor’s report. Meeting of the Shareholders on 2 May However, future events or conditions 2019 and the duration of our may cause the Group to cease to uninterrupted engagement, including continue as a going concern. previous renewals and reappointments, is 7 years. • Evaluate the overall presentation, structure and content of the The consolidated management report consolidated financial statements, on pages 99 is consistent with the including the disclosures, and consolidated financial statements and whether the consolidated financial has been prepared in accordance with statements represent the underlying applicable legal requirements. transactions and events in a manner The accompanying corporate that achieves fair presentation. governance statement on pages 66 to • Obtain sufficient appropriate audit 98 is the responsibility of the Board of evidence regarding the consolidated Directors. The information required by financial information of the entities article 68ter paragraph (1) letters c) and or business activities within the d) of the law of 19 December 2002 on Group to express an opinion on the the commercial and companies register consolidated financial statements. and on the accounting records and We are responsible for the direction, annual accounts of undertakings, as supervision and performance of the amended, is consistent with the Group audit. We remain solely consolidated financial statements and responsible for our audit opinion. has been prepared in accordance with applicable legal requirements.

Millicom 2019 Annual Report 119 Consolidated Statement of Income For the years ended December 31, 2019, 2018 and 2017

Consolidated statement of income for the years ended December 31, 2019, 2018 and 2017

Notes 2019 2018 (i) 2017 (i) (US$ millions) Revenue ...... B.1. 4,336 3,946 3,936 Cost of sales ...... B.2. (1,201) (1,117) (1,169) Gross profit...... 3,135 2,829 2,767 Operating expenses B.2. (1,604) (1,616) (1,531) Depreciation E.2.2., E.3. (825) (662) (670) Amortization E.1.3. (275) (140) (142) Share of profit in the joint ventures in Guatemala and Honduras A.2. 179 154 140 Other operating income (expenses), net B.2. (34) 75 69 Operating profit B.3. 575 640 632 Interest and other financial expenses C.3.3., E.3. (564) (367) (389) Interest and other financial income 20 21 16 Other non-operating (expenses) income, net B.5., C.7.3. 227 (39) (2) Profit (loss) from other joint ventures and associates, net A.3. (40) (136) (85) Profit (loss) before taxes from continuing operations 218 119 172 Charge for taxes, net B.6. (120) (112) (162) Profit (loss) for the year from continuing operations 97 7 10 Profit (loss) from discontinued operations, net of tax E.4.2. 57 (33) 60 Net profit (loss) for the year 154 (26) 69 Attributable to: The owners of Millicom 149 (10) 87 Non-controlling interests A.1.4. 5 (16) (17) Earnings (loss) per common share for profit (loss) attributable to the owners of the Company: Basic (US$ per common share): — from continuing operations 0.92 0.23 0.27 — from discontinued operations 0.56 (0.33) 0.59 — total B.7. 1.48 (0.10) 0.86 Diluted (US$ per common share): — from continuing operations 0.92 0.23 0.27 — from discontinued operations 0.56 (0.33) 0.59 Total B.7. 1.48 (0.10) 0.86

(i) Re-presented for discontinued operations (shown in note A.4.) 2018 and 2017 were not restated for the application of IFRS 16, and, additionally, 2017 was not restated for the application of IFRS 15 and IFRS 9, as the Group elected the modified retrospective approach.

The accompanying notes are an integral part of these consolidated financial statements.

120 Consolidated Statement of Comprehensive Income For the years ended December 31, 2019, 2018 and 2017

Consolidated statement of comprehensive income for the years ended December 31, 2019, 2018 and 2017

2019 2018 (i) 2017 (i) (US$ millions) Net profit (loss) for the year...... 154 (26) 69 Other comprehensive income (to be reclassified to statement of income in subsequent periods), net of tax: Exchange differences on translating foreign operations ...... (4) (81) 85 Change in value of cash flow hedges, net of tax effects...... (16) (1) 4 Other comprehensive income (not to be reclassified to the statement of income in subsequent periods), net of tax: Remeasurements of post-employment benefit obligations, net of tax effects ...... — — (2) Total comprehensive income (loss) for the year...... 133 (108) 158 Attributable to Owners of the Company ...... 131 (78) 173 Non-controlling interests...... 3 (30) (15) Total comprehensive income for the period arises from: Continuing operations...... 76 (102) 105 Discontinued operations...... 57 (7) 52

(i) Re-presented for discontinued operations (shown in note A.4.). 2018 and 2017 were not restated for the application of IFRS 16, and , additionally, 2017 was not restated for the application of IFRS 15 and IFRS 9, as the Group elected the modified retrospective approach.

The accompanying notes are an integral part of these consolidated financial statements.

121 Consolidated Statement of Financial Position For the year ended December 31, 2019 and 2018

Consolidated statement of financial position at December 31, 2019 and 2018

December 31 December 31 Notes 2019 2018 (i) (ii) (US$ millions) ASSETS NON-CURRENT ASSETS Intangible assets, net...... E.1. 3,219 2,346 Property, plant and equipment, net ...... E.2. 2,883 3,071 Right of use assets ...... E.3. 977 — Investments in joint ventures...... A.2. 2,797 2,867 Investments in associates ...... A.3. 25 169 Contract costs, net...... F.5. 5 4 Deferred tax assets...... B.6. 200 202 Other non-current assets...... G.5. 104 126 TOTAL NON-CURRENT ASSETS...... 10,210 8,785

CURRENT ASSETS Inventories...... F.2. 32 39 Trade receivables, net...... F.1. 371 343 Contract assets, net...... F.5. 41 37 Amounts due from non-controlling interests, associates and joint ventures...... G.5. 29 34 Prepayments and accrued income...... 156 129 Current income tax assets...... 119 108 Supplier advances for capital expenditure...... 22 25 Equity investments...... 371 — Other current assets...... 181 124 Restricted cash...... C.5. 155 158 Cash and cash equivalents ...... C.5. 1,164 528 TOTAL CURRENT ASSETS...... 2,641 1,525 Assets held for sale...... E.4.2. 5 3 TOTAL ASSETS ...... 12,856 10,313

(i) Not restated for the application of IFRS 16 as the Group elected the modified retrospective approach. (ii) The consolidated statement of financial position at December 31, 2018 has been restated after finalization of the Cable Onda purchase accounting (note A.1.2.).

The accompanying notes are an integral part of these consolidated financial statements.

122 Consolidated Statement of Financial Position For the year ended December 31, 2019 and 2018 (continued)

December 31 December 31 Notes 2019 2018 (i) (ii) (US$ millions) EQUITY AND LIABILITIES EQUITY Share capital and premium...... C.1. 633 635 Treasury shares...... (51) (81) Other reserves ...... C.1. (544) (538) Retained profits...... 2,222 2,535 Profit (loss) for the year attributable to equity holders ...... 149 (10) Equity attributable to owners of the Company...... 2,410 2,542 Non-controlling interests ...... A.1.4. 271 251 TOTAL EQUITY...... 2,680 2,792

LIABILITIES NON-CURRENT LIABILITIES Debt and financing...... C.3. 5,786 4,123 Lease liabilities...... C.4. 967 — Derivative financial instruments...... D.1.2. 17 — Amounts due to non-controlling interests, associates and joint ventures...... G.5. 337 135 Provisions and other non-current liabilities ...... F.4.2. 383 351 Deferred tax liabilities...... B.6. 279 236 TOTAL NON-CURRENT LIABILITIES ...... 7,770 4,845

CURRENT LIABILITIES Debt and financing...... C.3. 186 458 Lease liabilities...... C.4. 97 — Put option liability...... C.7.4. 264 239 Derivative financial instruments...... D.1.2. — — Payables and accruals for capital expenditure ...... 348 335 Other trade payables ...... 289 282 Amounts due to non-controlling interests, associates and joint ventures...... G.5. 161 348 Accrued interest and other expenses ...... 432 381 Current income tax liabilities ...... 75 55 Contract liabilities ...... F.5. 82 87 Provisions and other current liabilities...... F.4.1. 474 492 TOTAL CURRENT LIABILITIES ...... 2,406 2,676 Liabilities directly associated with assets held for sale...... E.4.2. — — TOTAL LIABILITIES...... 10,176 7,521 TOTAL EQUITY AND LIABILITIES ...... 12,856 10,313

The accompanying notes are an integral part of these consolidated financial statements.

123 Consolidated Statement of Cash Flows For the years ended December 31, 2019, 2018 and 2017

Consolidated statement of cash flows for the years ended December 31, 2019, 2018 and 2017

Notes 2019 2018(i) 2017(i) (US$ millions)

Cash flows from operating activities (including discontinued operations) Profit before taxes from continuing operations ...... 218 119 172 Profit (loss) before taxes from discontinued operations...... E.4.2. 59 (29) 55 Profit before taxes ...... 276 91 227 Adjustments to reconcile to net cash: (Finance) Lease interest expense ...... 157 91 64 Financial interest expense ...... 408 282 352 Interest and other financial income...... (20) (21) (16) Adjustments for non-cash items: Depreciation and amortization ...... 1,111 830 879 Share of profit in Guatemala and Honduras joint ventures...... A.2. (179) (154) (140) (Gain) on disposal and impairment of assets, net...... B.2., E.4.2. (40) (37) (99) Share based compensation...... C.1. 30 22 22 Transaction costs assumed by Cable Onda...... A.1.2. — 30 — Loss from other joint ventures and associates,net ...... A.3. 40 136 85 Other non-cash non-operating (income) expenses, net...... B.5. (227) 40 (2)

Changes in working capital: ...... Decrease (increase) in trade receivables, prepayments and other current assets,net...... (119) (128) 5 Decrease in inventories ...... 11 2 16 Increase (decrease) in trade and other payables, net...... (61) 69 (82) Changes in contract assets, liabilities and costs, net ...... (2) (9) — Total changes in working capital...... (172) (66) (61) Interest paid on (finance) leases...... (141) (89) (84) Interest paid on debt and other financing ...... (344) (229) (288) Interest received...... 15 20 16 Taxes (paid)...... (114) (153) (132) Net cash provided by operating activities...... 801 792 820 Cash flows from (used in) investing activities (including discontinued operations): Acquisition of subsidiaries, joint ventures and associates, net of cash acquired...... A.1. (1,014) (953) (22)

Proceeds from disposal of subsidiaries and associates, net of cash disposed...... E.4.2., A.3.2. 111 176 22 Purchase of intangible assets and licenses...... E.1.4. (171) (148) (133) Proceeds from sale of intangible assets...... — — 4 Purchase of property, plant and equipment...... E.2.3. (736) (632) (650) Proceeds from sale of property, plant and equipment...... C.3.4. 24 154 179 Proceeds from disposal of equity investment, net of costs...... 25 — — Dividends received from joint ventures ...... A.2.2. 237 243 203 Settlement of financial derivative instruments...... — (63) — Cash (used in) provided by other investing activities, net...... D.1.2. 20 24 31 Net cash used in investing activities...... (1,502) (1,199) (367)

124 Consolidated Statement of Cash Flows For the years ended December 31, 2019, 2018 and 2017 (continued)

Notes 2019 2018(i) 2017(i)

Cash flows from financing activities (including discontinued operations): Proceeds from debt and other financing...... C.3. 2,900 1,155 996 Repayment of debt and other financing...... C.3. (1,157) (530) (1,176) (Finance) Lease capital repayment...... (107) (17) (19) Advances for, and dividends paid to non-controlling interests A.1./A.2. (13) (2) — Dividends paid to owners of the Company...... C.2. (268) (266) (265) Net cash provided by (used in) financing activities ...... 1,355 341 (464) Exchange impact on cash and cash equivalents,net ...... (8) (33) 4 Net (decrease) increase in cash and cash equivalents ...... 645 (98) (8) Cash and cash equivalents at the beginning of the year ...... 528 619 646 Effect of cash in disposal group held for sale ...... E.4.2. (9) 6 (19) Cash and cash equivalents at the end of the year...... 1,164 528 619

(i) Re-presented for discontinued operations (shown in note A.4. and E.4.2.). 2018 and 2017 were not restated for the application of IFRS 16, and , additionally,2017 was not restated for the application of IFRS 15 and IFRS 9, as the Group elected the modified retrospective approach.

The accompanying notes are an integral part of these consolidated financial statements.

125 Consolidated Statement of Changes in Equity For the years ended December 31, 2019, 2018 and 2017

Consolidated statement of changes in equity for the years ended December 31, 2019, 2018 and 2017

Number of shares Non- Number held by controll of the Share Retaine Other ing shares Group capita Share Treasur d profits reserves interest Total (000’s) (000’s) l(i) premium y shares (ii) (iii) Total s equity (US$ millions) Balance on January 1, 2017...... 101,739 (1,395) 153 485 (123) 3,215 (562) 3,167 201 3,368 Total comprehensive income for the year...... — — — — — 86 87 173 (15) 158 Dividends (iv)...... — — — — — (265) — (265) — (265) Purchase of treasury shares ...... — (32) — — (3) — — (3) — (3) Share based compensation (v) ...... — — — — — — 22 22 — 22 Issuance of shares under share-based payment schemes...... — 233 — (1) 21 1 (18) 1 — 1 Balance on December 31, 2017 ...... 101,739 (1,195) 153 484 (106) 3,035 (472) 3,096 185 3,281 Adjustment on adoption of IFRS 15 and IFRS 9 (net of tax) (viii)...... — — — — — 10 — 10 (4) 6 Total comprehensive income for the year...... — — — — — (10) (68) (78) (30) (108) Dividends (iv)...... — — — — — (266) — (266) — (266) Dividends to non controlling interest ...... — — — — — — — — (13) (13) Purchase of treasury shares ...... — (70) — — (6) — — (6) — (6) Share based compensation (v) ...... — — — — — — 22 22 — 22 Issuance of shares under share-based payment schemes...... — 351 — (2) 31 (5) (22) 2 — 2 Effect of acquisition of Cable Onda (vii) ...... — — — — — — — — 113 113 Put option reserve(vii)...... — — — — — (239) — (239) — (239) Balance on December 31, 2018 ...... 101,739 (914) 153 482 (81) 2,525 (538) 2,542 251 2,792 Total comprehensive income for the year...... — — — — — 149 (19) 131 3 133 Dividends (iv)...... — — — — — (267) — (267) — (267) Dividends to non controlling interest ...... — — — — — — — — (1) (1) Purchase of treasury shares ...... — (132) — — (12) 4 — (8) — (8) Share based compensation (v) ...... — — — — — — 29 29 1 30 Issuance of shares under share-based payment schemes...... — 465 — (2) 41 (12) (25) 1 — 1

Effect of restructuring in Tanzania(vi)...... — — — — — (27) 9 (18) 18 — Balance on December 31, 2019 ...... 101,739 (581) 153 480 (51) 2,372 (544) 2,409 271 2,680

(i) Share capital and share premium – see note C.1. (ii) Retained profits – includes profit for the year attributable to equity holders, of which $306 million (2018: $324 million; 2017: $345 million) are not distributable to equity holders. (iii) Other reserves – see note C.1. (iv) Dividends – see note C.2. (v) Share-based compensation – see note C.1. (vi) Effect of the restructuring in Tanzania A.1.2. (vii) Effect of the acquisition of Cable Onda S.A. See notes A.1.2. and C.7.4. for further details. The consolidated statement of changes in equity at December 31, 2018 has been restated after finalization of the Cable Onda purchase accounting (note A.1.2.). (viii) “IFRS 15, “Revenue from contracts with customers” and IFRS 9, “Financial Instruments” were adopted effective January 1, 2018 using the modified retrospective method. The impact of adoption was recorded as an adjustment to retained profits. The accompanying notes are an integral part of these consolidated financial statements.

126 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017

Introduction

Corporate Information Millicom International Cellular S.A. (the “Company” or “MIC S.A.”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the “Group” or “Millicom”) is an international telecommunications and media group providing digital lifestyle services in emerging markets, through mobile and fixed telephony, cable, broadband, Pay-TV in Latin America (Latam) and Africa. The Company’s shares are traded as Swedish Depositary Receipts on the Stockholm stock exchange under the symbol TIGO SDB (formerly MIC SDB) and, since January 9, 2019, on the Nasdaq Stock Market in the U.S. under the ticker symbol TIGO. The Company has its registered office at 2, Rue du Fort Bourbon, L-1249 Luxembourg, Grand Duchy of Luxembourg and is registered with the Luxembourg Register of Commerce under the number RCS B 40 630. On November 14, 2019, Millicom's historical principal shareholder, Kinnevik AB, distributed its entire (approximately 37% of Millicom's outstanding shares) shareholding in Millicom to its own shareholders through a share redemption plan. Since that date, Kinnevik is no longer a related party or shareholder in Millicom. On February 24, 2020, the Board of Directors authorized these consolidated financial statements for issuance. Business activities Millicom operates its mobile businesses in Latin America (Bolivia, Colombia, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Paraguay), and in Africa (Ghana and Tanzania). Millicom operates various cable and fixed line businesses in Latin America (Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Paraguay). Millicom also provides direct to home satellite service in most of its Latam countries. On December 31, 2015, Millicom deconsolidated its operations in Guatemala and Honduras which are, since that date and for accounting purposes, under joint control. Millicom holds investments in online/e-commerce businesses in several countries in Africa (Jumia), in a tower infrastructure company in Africa (Helios Towers), as well as other small minority investments in other businesses such as micro-insurance (Milvik).

IFRS Consolidated Financial Statements

Basis of preparation These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the IASB (IFRS). They are also compliant with International Financial Reporting Standards as adopted by the European Union. This is in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of July 19, 2002, on the application of international accounting standards for listed companies domiciled in the European Union. The financial statements have been prepared on an historical cost basis, except for certain items including derivative financial instruments (measured at fair value), financial instruments that contain obligations to purchase own equity instruments (measured at the present value of the redemption price), and, up to December 31, 2018 prior to the adoption of IFRS 16 'Leases', property, plant and equipment under finance leases (initially measured at the lower of fair value and present value of the future minimum lease payments). This section contains the Group’s significant accounting policies that relate to the financial statements as a whole. Significant accounting policies specific to one note are included within that note. Accounting policies relating to non-material items are not included in these financial statements. Consolidation The consolidated financial statements of the Group comprise the financial statements of the Company and its subsidiaries as of December 31 of each year. The financial statements of the subsidiaries are prepared for the same reporting year as the Company, using consistent accounting policies. All intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group transactions are eliminated. Foreign currency Financial information in these financial statements are shown in the US dollar presentation currency of the Group and rounded to the nearest million (US$ million) except where otherwise indicated. The financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which each entity operates (the functional currency). The functional currency of each subsidiary, joint venture and associate reflects the economic substance of the underlying events and

127 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

circumstances of these entities. Except for El Salvador where the functional currency is US dollar, the functional currency in other countries is the local currency. The results and financial position of all Group entities (none of which operate in an economy with a hyperinflationary environment) with functional currency other than the US dollar presentation currency are translated into the presentation currency as follows: (i) Assets and liabilities are translated at the closing rate on the date of the statement of financial position; (ii) Income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and (iii) All resulting exchange differences are recognized as a separate component of equity (currency translation reserve), in the caption “Other reserves”. On consolidation, exchange differences arising from the translation of net investments in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are recorded in equity. When the Group disposes of or loses control or significant influence over a foreign operation, exchange differences that were recorded in equity are recognized in the consolidated statement of income as part of gain or loss on sale or loss of control and/or significant influence. Goodwill and fair value adjustments arising on acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. The following table presents functional currency translation rates for the Group’s locations to the US dollar on December 31, 2019, 2018 and 2017 and the average rates for the years ended December 31, 2019, 2018 and 2017.

2019 2018 2017 Exchange Rates to the 2019 Year- 2018 Year- Average Average Average US Dollar Functional Currency end Rate end Rate Change % Rate Rate Change % Rate Bolivia ...... Boliviano (BOB) 6.91 6.91 — % 6.91 6.91 —% 6.91 Chad ...... CFA Franc (XAF) n/a 580 n/a n/a 571 n/a 588 Colombia ...... Peso (COP) 3,277 3,250 0.8 % 3,296 2,973 10.9% 2,961 Costa Rica ...... Costa Rican Colon (CRC) 576 608 (5.2 )% 588 578 1.8% 571 El Salvador...... US dollar n/a n/a n/a n/a n/a n/a n/a Ghana...... Cedi (GHS) 5.73 4.82 18.9 % 5.33 4.63 15.0% 4.36 Guatemala...... Quetzal (GTQ) 7.70 7.74 (0.5 )% 7.71 7.52 2.5% 7.36 Honduras ...... Lempira (HNL) 24.72 24.42 1.2 % 24.59 23.99 2.5% 23.58 Luxembourg...... Euro (EUR) 0.89 0.87 2.5 % 0.89 0.85 5.1% 0.89 Nicaragua ...... Cordoba (NIO) 33.84 32.33 4.7 % 33.12 31.55 5.0% 30.05 Panama...... Balboa (B/.) (i) n/a n/a n/a n/a n/a n/a n/a Paraguay ...... Guarani (PYG) 6,453 5,961 8.3 % 6,232 5,743 8.5% 5,626 Sweden...... Krona (SEK) 9.365 8.85 5.8 % 9.43 8.71 8.3% 8.53 Tanzania ...... Shilling (TZS) 2,299 2,299 — % 2,304 2,274 1.3% 2,233 United Kingdom...... Pound (GBP) 0.75 0.78 (3.3 )% 0.78 0.75 4.3% 0.77

(i) the balboa is tied to the United States dollar at an exchange rate of 1:1.

128 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

New and amended IFRS accounting standards The following changes to standards effective for annual periods starting on January 1, 2018 have been adopted by the Group: IFRS 15 “Contracts with customers” establishes a five-step model related to revenue recognition from contracts with customers. Under IFRS 15, revenue is recognized at amounts that reflect the consideration that an entity expects to be entitled to in exchange for transferring goods or services to a customer. The Group adopted the accounting standard on January 1, 2018 using the modified retrospective method which had an immaterial impact on its Group financial statements. IFRS 15 mainly affects the timing of recognition of revenue as it introduces more differences between the billing and the recognition of the revenue and, in some cases, the recognition of the revenue as a principal (gross) or as an agent (net). However, it does not affect the cash flows generated by the Group.

As a consequence of adopting this Standard: 1) some revenue is recognized earlier, as a larger portion of the total consideration received in a bundled contract is attributable to the component delivered at contract inception (i.e. typically a subsidized handset). Therefore, this produces a shift from service revenue (which decreases) to the benefit of Telephone and Equipment revenue. This results in the recognition of a Contract Asset on the statement of financial position, as more revenue is recognized upfront, while the cash will be received throughout the subscription period (which is usually between 12 to 36 months). Contract Assets (and liabilities) are reported on a separate line in current assets / liabilities even if their realization period is longer than 12 months. This is because they are realized / settled as part of the normal operating cycle of our core business. 2) the cost incurred to obtain a contract (mainly commissions) is now capitalized in the statement of financial position and amortized over the average contract term. This results in the recognition of Contract Costs being capitalized under non-current assets on the statement of financial position. 3) the Group recognizes revenue from its wholesale carrier business on a net basis as an agent rather than as a principal under the modified retrospective IFRS 15 transition. Except for this effect, there were no other material changes for the purpose of determining whether the Group acts as principal or an agent in the sale of products. 4) the presentation of certain material amounts in the consolidated statement of financial position has been changed to reflect the terminology of IFRS 15: a. Contract assets recognized in relation to service contracts. b. Contract costs in relation to capitalized cost incurred to obtain a contract (mainly commissions). c. Contract liabilities in relation to service contracts were previously included in trade and other payables. The Group has adopted the standard using the modified retrospective method. Hence, the cumulative effect of initially applying the Standard has been recognized as an adjustment to the opening balance of retained earnings as at January 1, 2018 and comparative financial statements have not been restated in accordance with the transitional provisions in IFRS 15. The impact on the opening balance of retained profits as at January 1, 2018 is summarized in the table set out at the end of this section. Additionally, the Group has decided to take some of the practical expedients foreseen in the Standard, such as: • No adjustment to the transaction price for the means of a financing component whenever the period between the transfer of a promised good or service to a customer and the associated payment is one year or less; when the period is more than one year the financing component is adjusted, if material. • Disclosure in the Group Financial Statements the transaction price allocated to unsatisfied performance obligations only for contracts that have an original expected duration of more than one year (e.g. unsatisfied performance obligations for contracts that have an original duration of one year or less are not disclosed). • Application of the practical expedient not to disclose the price allocated to unsatisfied performance obligations, if the consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e, if billing corresponds to accounting revenue). • Application of the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. • Revenue recognition accounting principles are further described in Note B.1.1. • IFRS 9 “Financial Instruments” addresses the classification, measurement and recognition and impairments of financial assets and financial liabilities as well as hedge accounting. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification

129 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

depends on the Group’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. A final standard on hedging (excluding macro-hedging) was issued in November 2013 which aligns hedge accounting more closely with risk management and allows to continue hedge accounting under IAS 39. IFRS 9 also clarifies the accounting for certain modifications and exchanges of financial liabilities measured at amortized cost. The application of IFRS 9 did not have an impact for the Group on classification, measurement and recognition of financial assets and financial liabilities compared to IAS 39, but it has an impact on impairment of trade receivables and contracts assets (IFRS 15) as well as on amounts due from joint ventures and related parties - with the application of the expected credit loss model instead of the current incurred loss model. As permitted under IFRS 9, the Group adopted the standard without restating comparatives for classification, measurement and impairment. Hence, the cumulative effect of initially applying the Standard has been recognized as an adjustment to the opening balance of retained profits at January 1, 2018. The impact on the opening balance of retained profits at January 1, 2018 is summarized in the table set out at the end of this section. Additionally, the Group continues applying IAS 39 rules with respect to hedge accounting. Finally, the clarification introduced by IFRS 9 on the accounting for certain modifications and exchanges of financial liabilities measured at amortized cost did not have an impact for the Group. Financial instruments accounting principles are further described in Note C.7. The application of IFRS 15 and IFRS 9 had the following impact on the Group financial statements at January 1, 2018:

FINANCIAL POSITION As at January Effect of Effect of As at January 1, Reason $ millions 1, 2018 before adoption of adoption of 2018 after for the application IFRS 15 IFRS 9 application change

ASSETS...... Investment in joint ventures (non-current)...... 2,966 27 (4) 2,989 (i) Contract costs, net (non-current) NEW...... — 4 — 4 (ii) Deferred tax asset...... 180 — 10 191 (viii) Other non-current assets...... 113 — (1) 113 (iii) Trade receivables, net (current)...... 386 — (47) 339 (iv) Contract assets, net (current) NEW...... — 29 (1) 28 (v) LIABILITIES ...... Contract liabilities (current) NEW...... — 51 — 51 (vi) Provisions and other current liabilities ...... 425 (46) — 379 (vii) Deferred tax liability (non-current) ...... 56 7 (1) 62 (viii) EQUITY...... Retained profits and loss for the year...... 3,035 48 (38) 3,045 (ix) Non-controlling interests...... 185 — (5) 181 (ix)

(i) Impact of application of IFRS 15 and IFRS 9 for our joint ventures in Guatemala, Honduras and Ghana. (ii) This mainly represents commissions capitalized and amortized over the average contract term. (iii) Effect of the application of the expected credit losses required by IFRS 9 on amounts due from joint ventures. (iv) Effect of the application of the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables. (v) Contract assets mainly represents subsidized handsets as more revenue is recognized upfront while the cash will be received throughout the subscription period (which is usually between 12 to 36 months). (vi) This mainly represents deferred revenue for goods and services not yet delivered to customers that will be recognized when the goods are delivered and the services are provided to customers. The balance also comprises revenue from the billing of subscription fees or ‘one-time’ fees at the inception of a contract that are deferred and will be recognized over the average customer retention period or the contract term. (vii) Reclassification of deferred revenue to contract liabilities - see previous paragraph. (viii) Tax effects of the above adjustments. (ix) Cumulative catch-up effect.

As of January 1, 2018, IFRS 9 and IFRS 15 implementations had no impact on the statement of cash flows or on EPS.

130 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The following summarizes the amount by which each financial statement line item is affected in the current reporting year by the application of IFRS 15 as compared to previous standard and interpretations:

2018 INCOME STATEMENT As Without adoption of IFRS Effect of Change Higher/ Reason for the change $ millions reported 15 (Lower) Total revenue...... 3,946 4,023 (77) (i) Cost of sales ...... (1,117) (1,165) 48 (ii) Operating expenses...... (1,616) (1,656) 40 (ii) Share of profit in the joint ventures in Guatemala and Honduras...... 154 152 2 (iii) Tax impact ...... (112) (111) (1) (iv)

(i) Mainly for adjustments for "principal vs agent" considerations under IFRS 15 for wholesale carrier business, as well as for the shift in the timing of revenue recognition due to the reallocation of revenue from service (over time) to telephone and equipment revenue (point in time). (ii) Mainly for the reallocation of cost for selling devices due to shift from service revenue to telephone and equipment revenue, for the capitalization and amortization of contract costs and for adjustments for "principal vs agent" under IFRS 15 for wholesale carrier business. (iii) Impact of IFRS 15 related to our share of profit in our joint ventures in Guatemala and Honduras. (iv) Tax effects of the above adjustments.

FINANCIAL POSITION 2018 $ millions As reported Without adoption of IFRS Effect of Change Higher/ Reason for the change 15 (Lower) ASSETS ...... Investment in joint ventures (non- 2,867 2,839 28 (i) current) ...... Contract costs, net (non-current) ...... 4 — 4 (ii) Deferred tax assets ...... 202 200 2 (vi) Contract assets, net (current)...... 37 — 37 (iii) LIABILITIES...... Contract liabilities (current)...... 87 — 87 (iv) Provisions and other current liabilities...... 492 574 (82) (v) Current income tax liabilities...... 55 52 3 (vi) Deferred tax liabilities (non-current)...... 236 229 7 (vi) EQUITY ...... Retained profits and loss for the year ...... 2,525 2,468 57 (vii) Non-controlling interests ...... 251 248 3 (vii)

(i) Impact of application of IFRS 15 for our joint ventures in Guatemala, Honduras and Ghana. (ii) This mainly represents commissions capitalized and amortized over the average contract term. (iii) Contract assets mainly represents subsidized handsets as more revenue is recognized upfront while the cash will be received throughout the subscription period (which are usually between 12 to 36 months). Throughout the year ended December 31, 2018 no material impairment loss has been recognized. (iv) This mainly represents deferred revenue for goods and services not yet delivered to customers that will be recognized when the goods are delivered and the services are provided to customers. The balance also comprises the revenue from the billing of subscription fees or ‘one-time’ fees at the inception of a contract that are deferred and will be recognized over the average customer retention period or the contract term. (v) Reclassification of deferred revenue to contract liabilities - see previous paragraph. (vi) Tax effects of the above adjustments. (vii) Cumulative catch-up effect and IFRS 15 effect in the current year.

131 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The following changes to standards effective for annual periods starting on January 1, 2019 have been adopted by the Group: IFRS 16 "Leases"primarily affects the accounting for the Group’s operating leases. The commitments for operating leases are now recognized as right of use assets and lease liabilities for future payments. As a result, on adoption, on January 1, 2019, an additional lease liability of $545 million has been recognized (see note C.4.). The application of the new standard decreased operating expenses by $149 million, respectively, as compared to what our results would have been if we had continued to follow IAS 17 for year ended December 31, 2019. The impact of the adoption of the leasing standard and the new accounting policies are further explained below. The application of this standard also affects the Group’s depreciation, operating and financial expenses, debt and other financing, and leverage ratios see note C.3.. The change in presentation of operating lease expenses has resulted in a corresponding increase in cash flows derived from operating activities and a decline in cash flows from financing activities. Below you will find further details describing the impact of the adoption of IFRS 16 "Leases" on the Group’s financial statements. The amended accounting policies applied from January 1, 2019 are further disclosed in note E.3.. Explanation and effect of adoption of IFRS 16 The Group adopted the standard using the modified retrospective approach with the cumulative effect of applying the new Standard recognized in retained profits as of January 1, 2019. Its application had no significant impact on the Group's retained profits. Comparatives for the 2018 and 2017 financial statements were not restated. On adoption of IFRS 16, the Group recognized lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The right-of-use asset was measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the leases recognized in the statement of financial position immediately before the date of initial application. The weighted average incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 12.3%. Each lease commitment was individually discounted using a specific incremental borrowing rate, following a build-up approach including: risk- free rates, industry risk, country risk, credit risk at cash generating unit level, currency risk and commitment’s maturity. For leases previously classified as finance leases Millicom recognized the carrying amount of the lease asset and lease liability immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of initial application. The measurement principles of IFRS 16 are only applied after that date.

$ millions 2019 Operating lease commitments disclosed as at December 31, 2018 801 (Plus): Non lease components obligations...... 57 (Less): Short term leases recognized on a straight line basis as an expense ...... (3) (Less): Low value leases recognized on a straight line basis as an expense...... (2)

(Less): Contract included in the lease commitments but with starting date in 2019 and not part of the IFRS 16 opening (17) balances...... (Plus/Less): Other...... (9) Gross lease liabilities...... 828 Discounted using the lessee's incremental borrowing rate at the date of the initial application...... (283) Incremental lease liabilities recognized at January 1, 2019...... 545 (Plus): Finance lease liabilities recognized at December 31, 2018...... 353 Lease liabilities recognized at January 1, 2019 898

Of which are: Current lease liabilities...... 86 Non-current lease liabilities...... 812

132 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The application of IFRS 16 affected the following items in the statement of financial position on January 1, 2019:

FINANCIAL POSITION As at January 1, Effect of As at January 1, Reason $ millions 2019 before adoption of 2019 after for the application IFRS 16 application change

ASSETS...... Property, plant and equipment, net ...... 3,071 (307) 2,764 (i) Right-of-use asset (non-current) NEW ...... — 856 856 (ii) Prepayments 129 (6) 123 (iii) LIABILITIES...... Lease liabilities (non-current) NEW...... — 812 812 (iv) Debt and other financing (non-current) ...... 4,123 (337) 3,786 (v) Lease liabilities (current) NEW...... — 86 86 (iv) Debt and other financing (current)...... 458 (16) 442 (v) Other current liabilities...... 492 (2) 490 (vi)

(i) Transfer of previously capitalized assets under finance leases to Right-of-Use assets. (ii) Initial recognition of Right-of-Use assets, transfer of previously recognized finance leases and of lease prepayments to the Right-of-Use asset cost at transition. (iii) Transfer of lease prepayments to the Right-of-Use asset cost at transition. (iv) Initial recognition of lease liabilities and transfer of previously recognized finance lease liabilities. (v) Transfer of previously recognized finance lease liabilities to new Lease liabilities accounts. (vi) Reclassification of provisions for onerous contracts to Right-of-Use assets.

The application of IFRS 16 has also impacted classifications within the statement of income, statement of cash flows, segment information and EPS for the period starting from January 1, 2019. In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard: ◦ the use of a single discount rate to a portfolio of leases with reasonably similar characteristics ◦ reliance on previous assessments on whether leases are onerous ◦ the accounting for operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short- term leases ◦ the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and ◦ the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease. The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the Group relied on its assessment made when applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease. The following new or amended standards became applicable for the current reporting period and did not have any significant impact on the Group’s accounting policies or disclosures and did not require retrospective adjustments. ◦ Amendments to IFRS 9 "Financial instruments" on prepayment features with negative compensation. ◦ IFRIC 23 "Uncertainty over Income Tax Treatments" clarifies how the recognition and measurement requirements of IAS 12 Income taxes, are applied where there is uncertainty over income tax treatments. ◦ Amendments to IAS 19 "Employee benefits" on plan amendment, curtailment or settlement. ◦ Amendments to IAS 28 "Investments in associates" on long term interests in associates and joint ventures. ◦ Annual improvements 2015-2017.

133 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The following changes to standards, which are not expected to materially affect the Group, will be effective from January 1, 2020:

Amendments to the conceptual The IASB has revised its conceptual framework. The Framework is not an January 1, 2020 framework IFRS standard and does not override any standard, so nothing will change in the short term.The revised Framework will be used in future standard- setting decisions, but no changes will be made to current IFRS. Preparers might also use the Framework to assist them in developing accounting policies where an issue is not addressed by an IFRS. The Group does not expect these amendments to have a material impact on the consolidated financial statements as such. Amendments to IAS 1, These amendments to IAS 1, ‘Presentation of financial statements’, and IAS January 1, 2020 ‘Presentation of financial 8, ‘Accounting policies, changes in accounting estimates and errors’, and statements’, and IAS 8, consequential amendments to other IFRSs: i) use a consistent definition of materiality throughout IFRSs and the Conceptual Framework for ‘Accounting policies, changes in Financial Reporting; ii) clarify the explanation of the definition of material; accounting estimates and errors’ and iii) incorporate some of the guidance in IAS 1 about immaterial information. The Group does not expect this amendment to have a material impact on the consolidated financial statements.

Amendments to IFRS 3 - 'Business This amendment revises the definition of a business. According to January 1, 2020 Combinations' - definition of a feedback received by the IASB, application of the current guidance is business commonly thought to be too complex, and it results in too many transactions qualifying as business combinations. The Group does not expect this amendment to have a material impact on the consolidated financial statements. These amendments have not yet been endorsed by the EU.

Amendments to IFRS 9, IAS 39 The IASB has embarked on a two-phase project to consider what, if any, January 1, 2020 and IFRS 7 - Interest Rate reliefs to give from the effects of IBOR reform. For Phase 1, the IASB has Benchmark Reform. issued amendments to IFRS 9, IAS 39 and IFRS 7 that provide temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by IBOR reform. The reliefs relate to hedge accounting and have the effect that IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be recorded in the income statement. Given the pervasive nature of hedges involving IBOR based contracts, the reliefs will affect companies in all industries. The Group is currently assessing the impact of these amendments on the consolidated financial statements but do not expect it will have a material effect. IFRS 17, ‘Insurance contracts’ This standard replaces IFRS 4, which currently permits a wide variety of January 1, 2021 practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features. IFRS 17 will not have an impact on the consolidated financial statements. IFRS 17 has not been yet endorsed by the EU.

Judgments and critical estimates

The preparation of IFRS financial statements requires management to use judgment in applying accounting policies. It also requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates are based on management's best knowledge of current events, actions and best estimates as of a specified date, and actual results may ultimately differ from these estimates. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in each note and are summarized below:

134 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Judgments

Management apply judgment in accounting treatment and accounting policies in preparation of these financial statements. In particular, a significant level of judgment is applied regarding the following items: • Acquisitions – measurement at fair value of existing and newly identified assets, including the measurement of property, plant and equipment and intangible assets (e.g. particularly the customer lists being sensitive to significant assumptions as disclosed in note A.1.2.), liabilities, contingent liabilities and remaining goodwill; the assessment of useful lives; as well as the accounting treatment for transaction costs (see notes A.1.2., E.1.1., E.1.5., E.2.1.); • Impairment testing – key assumptions related to future business performance, perpetual growth rates and discount rates (see notes E.1.2., E.1.6., E.2.2.); • Revenue recognition – whether or not the Group acts as principal or as an agent, when there is one or several performance obligations and the determination of stand alone selling prices (see note B.1.1.); • Contingent liabilities – whether or not a provision should be recorded for any potential liabilities (see note G.3.); • Leases – In determining the lease term, including the assessment of whether the exercise of extension or termination options is reasonably certain and the corresponding impact on the selected lease term (see note E.3.); • Control – whether Millicom, through voting rights and potential voting rights attached to shares held, or by way of shareholders’ agreements or other factors, has the ability to direct the relevant activities of the subsidiaries it consolidates, or jointly direct the relevant activities of its joint ventures (see notes A.1., A.2.); • Discontinued operations and assets held for sale – definition, classification and presentation (see notes A.4., E.4.1.) as well as measurement of potential provisions related to indemnities; • Deferred tax assets – recognition based on likely timing and level of future taxable profits together with future tax planning strategies (see notes B.6.3.and G.3.2.); • Defined benefit obligations – key assumptions related to life expectancies, salary increases and leaving rates, mainly related to UNE Colombia (see note B.4.3.).

Estimates

Estimates are based on historical experience and other factors, including reasonable expectations of future events. These factors are reviewed in preparation of the financial statements although, due to inherent uncertainties in the evaluation process, actual results may differ from original estimates. Estimates are subject to change as new information becomes available and may significantly affect future operating results. Significant estimates have been applied in respect of the following items: • Accounting for property, plant and equipment, and intangible assets in determining fair values at acquisition dates, particularly for assets acquired in business combinations and sale and leaseback transactions (see notes A.1.and E.2.1.); • Useful lives of property, plant and equipment and intangible assets (see notes E.1.1., E.2.1.); • Provisions, in particular provisions for asset retirement obligations, legal and tax risks (see note F.4.); • Revenue recognition (see note B.1.1.); • Impairment testing including weighted average cost of capital (WACC), EBITDA margins, Capex intensity and long term growth rates (see note E.1.6.); • For leases, estimates in determining the incremental borrowing rate for discounting the lease payments in case interest rate implicit in the lease cannot be determined (see note E.3. ); • Estimates for defined benefit obligations (see note B.4.3.); • Accounting for share-based compensation in particular estimates of forfeitures and future performance criteria (see notes B.4.1., B.4.2.).

135 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A. The Millicom Group

The Group comprises a number of holding companies, operating subsidiaries and joint ventures with various combinations of mobile, fixed-line telephony, cable and wireless Pay TV, Internet and Mobile Financial Services (MFS) businesses. The Group also holds other small minority investments in other businesses such as micro-insurance (Milvik).

A.1. Subsidiaries

Subsidiaries are all entities which Millicom controls. Millicom controls an entity when it is exposed to, or has rights to variable returns from its investment in the entity, and has the ability to affect those returns through its power over the subsidiary. Millicom has power over an entity when it has existing rights that give it the current ability to direct the relevant activities, i.e. the activities that significantly affect the entity’s returns. Generally, control accompanies a shareholding of more than half of the voting rights although certain other factors (including contractual arrangements with other shareholders, voting and potential voting rights) are considered when assessing whether Millicom controls an entity. For example, although Millicom holds less than 50 % of the shares in its Colombian businesses, it holds more than 50 % of shares with voting rights. The contrary may also be true (e.g. Guatemala and Honduras). In respect of the joint ventures in Guatemala and Honduras, shareholders’ agreements require unanimous consents for decisions over the relevant activities of these entities (see also note A.2.2.). Therefore, the Group has joint control over these entities and accounts for them under the equity method. Our main subsidiaries are as follows:

December 31, December December Entity Country Activity 2019 31, 2018 31, 2017 Latin America In % In % In %

Telemovil El Salvador S.A. de C.V...... El Salvador Mobile, MFS, Cable, DTH 100 100 100 Millicom Cable Costa Rica S.A...... Costa Rica Cable, DTH 100 100 100

Telefonica Celular de Bolivia S.A...... Bolivia Mobile, DTH, MFS, Cable 100 100 100 Telefonica Celular del Paraguay S.A...... Paraguay Mobile, MFS, Cable, PayTV 100 100 100 Cable, PayTV, Internet, DTH, Cable Onda S.A (i)...... Panama Fixed-line 80 80 — Telefonica Moviles Panama (ii)...... Panama Mobile 80 — — Telefonia Cellular de Nicaragua sa (ii) ...... Nicaragua Mobile 100 — — Colombia Móvil S.A. E.S.P. (iii)...... Colombia Mobile 50-1 share 50-1 share 50-1 share Fixed-line, Internet, PayTV, UNE EPM Telecomunicaciones S.A.(iii) ...... Colombia Mobile 50-1 share 50-1 share 50-1 share

Edatel S.A. E.S.P. (iii)...... Colombia Fixed-line, Internet, PayTV, Cable 50-1 share 50-1 share 50-1 share Africa Sentel GSM S.A.(v) ...... Senegal Mobile, MFS — — 100 MIC Tanzania Public Limited Company (vi)...... Tanzania Mobile, MFS 98.5 100 100 Millicom Tchad S.A. (v) ...... Chad Mobile, MFS — 100 100 Millicom Rwanda Limited (v)...... Rwanda Mobile, MFS — — 100 Zanzibar Telecom Limited (vi)...... Tanzania Mobile, MFS 98.5 85 85 Unallocated Millicom International Operations S.A...... Luxembourg Holding Company 100 100 100 Millicom International Operations B.V...... Netherlands Holding Company 100 100 100 Millicom LIH S.A...... Luxembourg Holding Company 100 100 100 MIC Latin America B.V...... Netherlands Holding Company 100 100 100 Millicom Africa B.V...... Netherlands Holding Company 100 100 100 Millicom Holding B.V...... Netherlands Holding Company 100 100 100 Millicom International Services LLC...... USA Services Company 100 100 100 Millicom Services UK Ltd (vii) ...... UK Services Company 100 100 100 Millicom Spain S.L...... Spain Holding Company 100 100 100

136 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

(i) Acquisition completed on December 13, 2018. Cable Onda S.A. is fully consolidated as Millicom has the majority of voting shares to direct the relevant activities. See note A.1.2.. (ii) Companies acquired during the year. See note A.1.2. (iii) Fully consolidated as Millicom has the majority of voting shares to direct the relevant activities. (iv) Merged with Airtel Ghana in October 2017 and classified as discontinued operations for the year then ended (see note E.4.2.). Merged entity is accounted for as a joint venture as from merger date (see note A.2.2.). (v) Companies disposed of in 2018 or 2019. See note A.1.3. (vi) Change in ownership percentages as a result of the in-country restructuring . See note A.1.2. (vii) Millicom Services UK Ltd with registered number 08330497 will take advantage of an audit exemption to prepare stand alone financial statements for the year ended December 31, 2019 as set out within section 479A of the Companies Act 2006.

A.1.1. Accounting for subsidiaries and non-controlling interests

Subsidiaries are fully consolidated from the date on which control is transferred to Millicom. If facts and circumstances indicate that there are changes to one or more of the elements of control, a reassessment is performed to determine if control still exists. Subsidiaries are de-consolidated from the date that control ceases. Transactions with non-controlling interests are accounted for as transactions with equity owners of the Group. Gains or losses on disposals of non-controlling interests are recorded in equity. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is also recorded in equity.

A.1.2. Acquisition of subsidiaries and changes in non-controlling interests in subsidiaries

Scope changes 2019

1. Telefonica CAM Acquisitions On February 20, 2019, MIC S.A., Telefonica Centroamerica and Telefonica S.A. entered into 3 separate share purchase agreements (the “Telefonica CAM Acquisitions”) pursuant to which, subject to the terms and conditions contained therein, Millicom agreed to purchase 100% of the shares of Telefonica Moviles Panama, S.A., a company incorporated under the laws of Panama, from Telefonica Centroamerica (the “Panama Acquisition”), 100% of the shares of Telefonica de Costa Rica TC, S.A., a company incorporated under the laws of Costa Rica, from Telefonica (the “Costa Rica Acquisition”) and 100% of the shares of Telefonia Celular de Nicaragua, S.A., a company incorporated under the laws of Nicaragua, from Telefonica Centroamerica (the “Nicaragua Acquisition”). The Telefonica CAM Acquisitions Share Purchase Agreements contain customary representations and warranties and termination provisions. The consummation of the Costa Rica Acquisition is still subject to regulatory approvals and is expected to close in H1 2020. Acquisition related costs for Nicaragua and Panama acquisitions included in the statement of income under operating expenses were approximately $16 million for the year. The aggregate purchase price for the Telefonica CAM Acquisitions is $1.65 billion, subject to potential purchase price adjustments. a) Nicaragua Acquisition This transaction closed on May 16, 2019 after receipt of the necessary approvals and, since that date, Millicom holds all voting rights into Telefonia Celular de Nicaragua ("Nicaragua") and controls it. On the same day, Millicom paid an original cash consideration of $437 million, provisionally adjusted to $430 million as of December 31, 2019 and still subject to final price adjustment expected in Q1 2020. The purchase consideration also includes potential indemnifications from the sellers (including potential tax contingencies and litigations). For the purchase accounting, Millicom determined the provisional fair values of Nicaragua's identifiable assets and liabilities based on transaction and relative fair values. The purchase accounting is still provisional at December 31, 2019, particularly in respect of the final price adjustment and the evaluation of the right-of-use assets and lease liabilities. Management expects to finalize the purchase accounting in Q1 2020.

137 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The provisional purchase accounting as at December 31, 2019 is as follows

Provisional Fair values (100%)

(US$ millions) Intangible assets (excluding goodwill) (i) 131 Property, plant and equipment (ii) 149 Right of use assets (iii) 131 Other non-current assets 2 Current assets (excluding cash) (iv) 23 Trade receivables (v) 17 Cash and cash equivalents 7 Total assets acquired 459 Lease liabilities (iii) 131 Other liabilities (vi) 118 Total liabilities assumed 249 Fair value of assets acquired and liabilities assumed, net 210 Acquisition price 430 Provisional Goodwill 220

(i) Intangible assets not previously recognized at the date of acquisition, are mainly customer lists for an amount of $81 million, with estimated useful lives ranging from 4 to 10 years. In addition, a fair value step-up of $39 million on the spectrum held by Nicaragua has been recognized, with a remaining useful life of 14 years. (ii) A fair value step-up of $39 million has been recognized on property, plant and equipment, mainly on the core network ($25 million) and owned land and buildings ($8 million). The expected remaining useful lives were estimated at 6-7 years on average. (iii) The Group measured the lease liability at the present value of the remaining lease payments (as defined in IFRS 16) as if the acquired lease were a new lease at the acquisition date. The right-of-use assets have been adjusted by $7 million to be measured at the same amount as the lease liabilities. (iv) Current assets include indemnification assets for tax contingencies at fair value for an amount of $11 million - see (v) below. (v) The fair value of trade receivables acquired was $17 million. (vi) Other liabilities include the fair value of certain possible tax contingent liabilities for $1 million and a deferred tax liability of $50 million resulting from the above adjustments The goodwill is currently not expected to be tax deductible, and is attributable to expected synergies and convergence with our legacy fixed business in the country, as well as to the fair value of the assembled work force. For convenience purposes, the acquisition date was set on May 1, 2019 as there were no material transactions from this date to May 16, 2019. From May 1, 2019 to December 31, 2019, Nicaragua contributed $144 million of revenue and a net profit of $5 million to the Group. If the acquisition had occurred on January 1, 2019 incremental revenue for the year ended December 31, 2019 for the Group would have been $219 million and incremental net loss for that period would have been $16 million, including amortization of assets not previously recognized of $12 million (net of tax).

Key assumptions used in fixed assets valuation The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:

Major class of assets Valuation method Key assumption 1 Key assumption 2 Key assumption 3 Market approach - Terminal growth rate: Estimated duration: 14 Spectrum Market comparable Discount rate : 14% 2.5% years transactions Income approach - Monthly Churn rate: EBITDA margin: ~ 36% Customer lists Multi-Period Discount rate: 14-15% From 1.2% for B2B Excess Earnings to 2.9% for B2C to 41% Method Economic useful life Price per square meter: Land and buildings Market approach (range): 10-30 years from $2 to $57 N/A Remaining useful life Core network Cost approach Economic useful life (minimum) : 1.7 N/A (range): 5-27 years years

138 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

b) Panama Acquisition This transaction closed on August 29, 2019 after receipt of the necessary approvals and, since that date, Cable Onda, which is 80% owned by Millicom, holds all voting rights in Telefonica Moviles Panama, S.A. ("Panama") and controls it. On the same day, Cable Onda paid an original cash consideration of $594 million to acquire 100% of the shares of Panama, subject to a final price adjustment expected in Q1 2020. The purchase consideration also includes potential indemnifications from the sellers (including potential tax contingencies and litigations). For the purchase accounting, Millicom determined the fair value of Panama's identifiable assets and liabilities based on transaction and relative fair values. The purchase accounting is still provisional at December 31, 2019, particularly in respect of the evaluation of property, plant and equipment, right-of-use assets and lease liabilities, final price adjustment and their resulting impact on the current valuation of intangible assets. Management expects to finalize the purchase accounting during the first half of 2020. No non-controlling interests are recognized at acquisition date as Cable Onda acquired 100% of the shares of Panama. Though, non- controlling interests are recognized in Panama's results from the date of acquisition.

139 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The provisional purchase accounting as at December 31, 2019 is as follows:

Provisional Fair values (100%)

(US$ millions) Intangible assets (excluding goodwill) (i) 169 Property, plant and equipment 110 Right of use assets 57 Other non-current assets 3 Current assets (excluding cash) 23 Trade receivables (ii) 21 Cash and cash equivalents 10 Total assets acquired 391 Lease liabilities 48 Other debt and financing 74 Other liabilities (iii) 101 Total liabilities assumed 224 Fair value of assets acquired and liabilities assumed, net 167 Acquisition price 594 Provisional Goodwill 426

(i) Intangible assets not previously recognized at the date of acquisition, are mainly customer lists for an amount of $58 million, with estimated useful lives ranging from 3 to 17 years. In addition, a fair value step-up of $3 million on the spectrum held by Panama has been recognized, with a remaining useful life of 17 years. (ii) The fair value of trade receivables acquired was $21 million. (iii) Other liabilities include a deferred tax liability of $15 million resulting from the above adjustments The goodwill is currently not expected to be tax deductible and is attributable to expected synergies and convergence with Cable Onda, as well as to the fair value of the assembled work force. For convenience purposes, the acquisition date was set on September 1, 2019. From September 1, 2019 to December 31, 2019, Panama contributed $80 million of revenue and a net profit of $6 million to the Group. If Panama had been acquired on January 1, 2019 incremental revenue for the twelve-month period ended December 31, 2019 for the Group would have been $158 million and incremental net profit for that period would have been $1 million, including amortization of assets not previously recognized of $3 million (net of tax). Key assumptions used in fixed assets valuation The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:

Major class of assets Valuation method Key assumption 1 Key assumption 2 Key assumption 3 Market approach - Spectrum Market comparable Discount rate: 9.8% Terminal growth rate: Estimated duration: 17 transactions 2.9% years Income approach - Monthly Churn rate: Multi-Period From 0.4% for B2C EBITDA margin: ~ 35% Customer lists Excess Earnings Discount rate: 9.8-11% postpaid to 3.9% for to 39% Method B2C prepaid

2. Tanzania restructuring In October 2019, with the view of listing the shares of MIC Tanzania Public Limited Company ('MIC Tanzania') on the local stock exchange (see note H), Millicom completed the restructuring of its investments in different operations in the country. Mainly, MIC Tanzania acquired all the shares of Zantel, which was partially held by the Government of Zanzibar (15%). In exchange of the contribution of its 15% shares in Zantel to MIC Tanzania, the Government of Zanzibar received 1.5% of newly issued shares in MIC Tanzania. This restructuring did not result in the Group losing control in Zantel nor MIC Tanzania, and has therefore been recognized as an equity transaction. As a consequence, the Group owners’ equity decreased by a net amount of $18 million as a result of the derecognition of the 15% non- controlling interests in Zantel and the recognition of 1.5% non-controlling interests in MIC Tanzania.

140 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

3. Others During the year ended December 31, 2019, the Group also completed minor additional acquisitions.

Scope changes 2018

1. Cable Onda acquisition On October 7, 2018, the Company signed an agreement to acquire a controlling 80% stake in Cable Onda, the largest cable and fixed telecommunications services provider in Panama. The selling shareholders retained a 20% equity stake in the company. The transaction closed on December 13, 2018 after receipt of necessary approvals, for final cash consideration of $956 million. Millicom concluded that it controls Cable Onda since closing date and therefore fully consolidates it in its financial statements with a 20% non-controlling interest. The deal also includes certain liquidity rights such as call and put options that have been amended as a result of the acquisition of Telefonica Moviles Panama, S.A.. See note C.7.4. for further details on the accounting treatment of these options.

For the purchase accounting, Millicom determined the fair value of Cable Onda identifiable assets and liabilities based on transaction and relative values. The non-controlling interest was measured based on the proportionate share of the fair value of the net assets of Cable Onda. The exercise has been finalized in December 2019. The main adjustments compared to the provisional fair values relate to the final valuation of the property, plant and equipment for a net increase of $30 million, as well as its related impact on the customer list fair value (a decrease of $20 million) and deferred tax liabilities (net increase of $3 million). The remaining adjustments are linked to reassessment of contingent liabilities and corresponding indemnification assets. As a result, goodwill decreased by $8 million as follows:

Provisional Fair values Final Fair (100%) values (100%) Changes (US$ (US$ millions) (US$ millions) millions) Intangible assets (excluding goodwill) (i) 673 653 (20) Property, plant and equipment (ii) 348 378 30 Current assets (excluding cash)(iii) 54 50 (4) Cash and cash equivalents 12 12 — Total assets acquired 1,088 1,094 6 Non-current liabilities(iv) 422 425 3 Current liabilities 141 134 (7) Total liabilities assumed 563 559 (4) Fair value of assets acquired and liabilities assumed, net 525 535 10 Transaction costs assumed by Cable Onda (v) 30 30 — Fair value of non-controlling interest in Cable Onda (20%) 111 113 2 Millicom’s interest in the fair value of Cable Onda (80%) 444 452 8 Acquisition price 956 956 0 .. Final Goodwill 512 504 (8) (i) Intangible assets not previously recognized (or partially recognized as a result of previous acquisitions) are trademarks for an amount of $280 million, with estimated useful lives of 3 years, a customer list for an amount of $350 million, with estimated useful life of 20 years and favorable content contracts for $19 million, with a useful life of 10 years. (ii) A net fair value step-up of $30 million has been recognized on property, plant and equipment, mainly on the core network ($11 million). The expected remaining useful lives were estimated at 5 years on average. (iii) Current assets include trade receivables amounting to a fair value of $34 million. (iv) Non-current liabilities include the deferred tax liability of $161 million resulting from the above adjustments. (v) Transaction costs of $30 million have been assumed and paid by Cable Onda before the acquisition or by Millicom on the closing date. Because of their relationship with the acquisition, these costs have been accounted for as post-acquisition costs in the Millicom Group statement of income. These, together with acquisition-related costs of $11 million, have been recorded under operating expenses in the statement of income of the year.

The completion of the purchase price allocation did not result in any material impact on the statement of income for the years ended December 31, 2018 and December 31, 2019, respectively, in respect of values previously recorded in the provisional purchase accounting.

141 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The goodwill, which is not expected to be tax deductible, is attributable to Cable Onda’s strong market position and profitability, as well as to the fair value of the assembled work force. From December 13, 2018 to December 31, 2018, Cable Onda contributed $17 million of revenue and a net loss of $7 million to the Group. If Cable Onda had been acquired on 1 January 2018 incremental revenue for the 2018 year would have been $403 million and incremental net loss for that period of $59 million, including amortization of assets not previously recognized of $85 million (net of tax). Key assumptions used in fixed assets valuation The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:

Major class of assets Valuation method Key assumption 1 Key assumption 2 Key assumption 3 Income approach - Relief-from-Royalty Brands approach Discount rate: 10% Royalty rate: 4.5% Tax rate: 25% Income approach - Multi-Period Discount rate: 10% Yearly Churn rate: EBITDA margin: ~ 48% Excess Earnings 5.8% in average Customer lists Method Remaining useful Cost approach Economic useful life life (minimum): N/A Property, plant & equipment (range): 5-15 years 2-8 years

142 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A.1.3. Disposal of subsidiaries and decreases in non-controlling interests of subsidiaries

Chad On June 26, 2019, the Group completed the disposal of its operations in Chad for a final cash consideration of $110 million. In accordance with Group practices, the Chad operation has been classified as assets held for sale and discontinued operations as from June 5, 2019 and prior periods restated. On June 26, 2019, Chad was deconsolidated and a gain on disposal of $77 million was recognized (see also note E.4.). Rwanda On December 19, 2017, Millicom announced that it has signed an agreement for the sale of its Rwanda operations to subsidiaries of Bharti Airtel Limited for a final cash consideration of $51 million, including a deferred cash payment due in January 2020 for an amount of $18 million. The transaction also included earn-outs for $7 million that were not recognized by the Group as management does not believe these will be triggered. The sale was completed on January 31, 2018. In accordance with Group practices, Rwanda operations’ assets and liabilities were classified as held for sale on January 23, 2018. Rwanda’s operations also represented a separate geographical area and did qualify for discontinued operations presentation; results were therefore shown on a single line in the statements of income under ‘Profit (loss) for the year from discontinued operations, net of tax’ (see also note E.4.). Senegal On July 28, 2017, Millicom announced that it had agreed to sell its Senegal business to a consortium consisting of NJJ, Sofima (managed by the Axian Group) and Teylium Group. In accordance with Group practices, Senegal operations’ assets and liabilities were classified as held for sale on February 2, 2017. Senegal’s operations also represented a separate geographical area and did qualify for discontinued operations. The sale was completed on April 27, 2018 in exchange of a cash consideration of $151 million. (see also note E.4.) Ghana merger On March 3, 2017, Millicom and Bharti Airtel Limited (Airtel) announced that they had entered into an agreement for Tigo Ghana Limited and Airtel Ghana Limited to combine their operations in Ghana. In accordance with Group practices, Ghana operations’ assets and liabilities were classified as held for sale on September 30, 2017. Ghana’s operations also represented a separate geographical area and did qualify for discontinued operations. The transaction was completed on October 12, 2017 (see also note E.4.). Other disposals For the years ended December 31, 2019, 2018 and 2017, Millicom did not dispose of any other significant investments.

A.1.4. Summarized financial information relating to significant subsidiaries with non-controlling interests

At December 31, 2019 and 2018, Millicom’s subsidiaries with material non-controlling interests were the Group’s operations in Colombia and Panama.

Balance sheet – non-controlling interests

December 31, 2019 2018(i) (US$ millions) Colombia 170 161 Panama 99 105 Others 2 (16) Total 271 251

(i) Restated as a result of the finalization of Cable Onda purchase accounting, see note A.1.2.

143 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Profit (loss) attributable to non-controlling interests

2019 2018 2017 (US$ millions) Colombia 11 (5) (13) Panama (6) (8) — Others — (3) (4) Total 5 (16) (17)

The summarized financial information for material non-controlling interests in our operations in Colombia and Panama is provided below. This information is based on amounts before inter-company eliminations.

Colombia

2019 2018 2017 (US$ millions) Revenue 1,532 1,661 1,739 Total operating expenses (543) (667) (647) Operating profit 164 147 106 Net (loss) for the year 23 (10) (25) 50% non-controlling interest in net (loss) 11 (5) (13) Total assets (excluding goodwill) 2,256 1,966 2,193 Total liabilities 1,891 1,620 1,771 Net assets 365 346 422 50% non-controlling interest in net assets 183 173 211 Consolidation adjustments (13) (12) (15) Total non-controlling interest 170 161 197 Dividends and advances paid to non-controlling interest (12) (2) 0 Net cash from operating activities 363 348 331 Net cash from (used in) investing activities (260) (270) (209) Net cash from (used in) financing activities (67) (75) (46) Exchange impact on cash and cash equivalents, net — (18) 3 Net increase in cash and cash equivalents 36 (15) 80

144 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Panama

2019 (ii) 2018 (i) (US$ millions) Revenue 475 17 Total operating expenses (148) (8) Operating profit (15) (39) Net (loss) for the year (31) (39) 20% non-controlling interest in net (loss) (6) (8) Total assets (excluding Millicom's goodwill in Cable Onda) 1,866 1,082 Total liabilities 1,372 556 Net assets 494 526 20% non-controlling interest in net assets 99 105 Consolidation adjustments — — Total non-controlling interest 99 105 Dividends and advances paid to non-controlling interest — — Net cash from operating activities 167 (2) Net cash from (used in) investing activities (iii) (693) 12 Net cash from (used in) financing activities (iii) 580 (3) Exchange impact on cash and cash equivalents, net — — Net increase in cash and cash equivalents 54 7

(i) Cable Onda was acquired on December 13, 2018 and 2018 figures therefore only include results and cash flows from the date of acquisition. (ii) 2019 figures include the full year results and cash flows of Cable Onda, as well as 4 months of Telefonica Panama which was consolidated from September 1, 2019. (iii) In 2019, Cable Onda acquired Telefonica Panama for $594 million (note A.1.2.), financed by issuing a $600 million Senior Notes due 2030 (note C.3.1.)

145 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A.2. Joint ventures

Joint ventures are businesses over which Millicom exercises joint control as decisions over the relevant activities of each require unanimous consent of shareholders. Millicom determines the existence of joint control by reference to joint venture agreements, articles of association, structures and voting protocols of the board of directors of those ventures. At December 31, 2019, the equity accounted net assets of our joint ventures in Guatemala, Honduras and Ghana totaled $3,346 million (December 31, 2018: $3,405 million for Guatemala and Honduras only). These net assets do not necessarily represent statutory reserves available for distribution as these include consolidation adjustments (such as goodwill and identified assets and assumed liabilities recognized as part of the purchase accounting). Out of these reserves, $142 million (December 31, 2018: $133 million) represent statutory reserves that are unavailable to be distributed to the Group. During the year ended December 31, 2019, Millicom’s joint ventures paid $237 million (December 31, 2018: $243 million) as dividends or dividend advances to the Company. Our main joint ventures are as follows:

December December 31, 2019 % 31, 2018 % Entity Country Activity holding holding Comunicaciones Celulares S.A(i). Guatemala Mobile, MFS 55 55 Navega.com S.A.(i) Guatemala Cable, DTH 55 55 Telefonica Celular S.A(i). Honduras Mobile, MFS 66.7 66.7 Navega S.A. de CV(i) Honduras Cable 66.7 66.7 Bharti Airtel Ghana Holdings B.V. Ghana Mobile, MFS 50 50

(i) Millicom owns more than 50% of the shares in these entities and has the right to nominate a majority of the directors of each of these entities. However, key decisions over the relevant activities must be taken by a supermajority vote. This effectively gives either shareholder the ability to veto any decision and therefore neither shareholder has sole control over the entity. Therefore, the operations of these joint ventures are accounted for under the equity method. The carrying values of Millicom’s investments in joint ventures were as follows:

Carrying value of investments in joint ventures at December 31

% 2019 2018 (US$ millions) Honduras operations(i) 66.7 708 730 Guatemala operations(i) 55 2,089 2,104 AirtelTigo Ghana operations 50 — 32 Total 2,797 2,867

(i) Includes all the companies under the Honduras and Guatemala groups. The table below summarizes the movements for the year in respect of the Group’s joint ventures carrying values:

146 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Guatemala(i) Honduras (i) Ghana(ii) (US$ millions) Opening balance at January 1, 2018 2,145 726 96 Adjustments on adoption of IFRS 15 and IFRS 9 (net of tax) 18 5 0 Change in scope — — 0 Results for the year 131 23 (68) Capital increase — 3 — Dividends declared during the year (177) — — Currency exchange differences (14) (26) 3 Closing balance at December 31, 2018 2,104 730 32 Accounting policy changes — — — Capital increase — — 5 Results for the year 152 27 (40) Utilization of past recognized losses — — (5) Dividends declared during the year (170) (37) — Currency exchange differences 2 (12) 8 Closing balance at December 31, 2019 2,089 708 —

(i) Share of profit (loss) is recognized under ‘Share of profit in the joint ventures in Guatemala and Honduras’ in the statement of income. (ii) Share of profit (loss) is recognized under ‘Income (loss) from other joint ventures and associates, net’ in the statement of income. At December 31, 2019 and 2018 the Group had not incurred obligations, nor made payments on behalf of the Guatemala, Honduras or Ghana operations.

A.2.1. Accounting for joint ventures

Joint ventures are accounted for using the equity method of accounting and are initially recognized at cost (calculated at fair value if it was a subsidiary of the Group before becoming a joint venture). The Group’s investments in joint ventures include goodwill (net of any accumulated impairment loss) on acquisition. The Group’s share of post-acquisition profits or losses of joint ventures is recognized in the consolidated statement of income and its share of post-acquisition movements in reserves is recognized in reserves. Cumulative post-acquisition movements are adjusted against the carrying amount of the investments. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, including any other unsecured receivables, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the joint ventures. Gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in joint ventures are recognized in the statement of income. After application of the equity method, including recognizing the joint ventures’ losses, the Group applies IFRS 9 to determine whether it is necessary to recognize any additional impairment loss with respect to its net investment in the joint venture.

A.2.2. Material joint ventures – Guatemala, Honduras and Ghana operations

Summarized financial information for the years ended December 31, 2019, 2018 and 2017 of the Guatemala and Honduras operations is as follows. This information is based on amounts before inter-company eliminations.

147 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Guatemala

2019 2018 2017 (US$ millions) Revenue...... 1,434 1,373 1,328 Depreciation and amortization ...... (313) (283) (295) Operating profit(i)...... 429 387 352 Financial income (expenses), net...... (66) (56) (60) Profit before taxes...... 356 309 305 Charge for taxes, net...... (79) (69) (74) Profit for the year ...... 277 240 230 Net profit for the year attributable to Millicom...... 152 131 126 Dividends and advances paid to Millicom...... 209 211 162 Total non-current assets (excluding goodwill)...... 2,517 2,280 2,406 Total non-current liabilities ...... 1,216 981 1,052 Total current assets...... 717 718 756 Total current liabilities...... 251 221 220 Total net assets 1,767 1,796 1,890 Group's share in % 55% 55% 55% Group's share in USD millions 972 988 1,040 Goodwill and consolidation adjustments 1,117 1,116 1,106 Carrying value of investment in joint venture 2,089 2,104 2,145

Cash and cash equivalents ...... 189 217 303 Debt and financing – non-current...... 1,152 928 995 Debt and financing – current ...... 21 — — Net cash from operating activities...... 588 545 498 Net cash from (used in) investing activities...... (205) (173) (171) Net cash from (used in) financing activities...... (412) (455) (315) Exchange impact on cash and cash equivalents, net ...... 1 (3) 2 Net increase in cash and cash equivalents...... (28) (86) 14

(i) In 2017, operating profit included a provision for impairment of $10 million on the fixed assets related to video surveillance contracts with the Civil National Police. Guatemala financing In 2014, Intertrust SPV (Cayman) Limited, acting as trustee of the Comcel Trust, a trust established and consolidated by Comcel for the purposes of the transaction, issued $800 million 6.875% Senior Notes to refinance existing local and MIC S.A. corporate debt. The bond was issued at 98.233% of the principal and has an effective interest rate of 7.168%. The bond is guaranteed by Comcel and listed on the Luxembourg Stock Exchange.

148 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Honduras

2019 2018 2017 (US$ millions) Revenue...... 594 586 585 Depreciation and amortization ...... (132) (133) (156) Operating profit...... 102 91 70 Financial income (expenses), net...... (37) (29) (27) Profit before taxes...... 60 52 41 Charge for taxes, net...... (21) (18) (18) Profit for the year ...... 39 34 23 Net profit for the year attributable to Millicom...... 27 23 15 Dividends and advances paid to Millicom...... 28 32 40 Total non-current assets (excluding goodwill)...... 516 506 576 Total non-current liabilities ...... 469 386 407 Total current assets...... 312 304 208 Total current liabilities...... 183 226 282 Total net assets...... 176 198 95 Group's share in %...... 66.7% 66.7% 66.7% Group's share in USD millions ...... 117 132 63 Goodwill and consolidation adjustments...... 591 598 663 Carrying value of investment in joint venture...... 708 730 726

Cash and cash equivalents ...... 40 25 16 Debt and financing – non-current...... 384 298 308 Debt and financing – current ...... 39 85 80 Net cash from operating activities...... 169 147 152 Net cash from (used in) investing activities...... (77) (87) (74) Net cash from (used in) financing activities...... (77) (50) (74) Net (decrease) increase in cash and cash equivalents...... 15 9 3

Honduras financing On September 19, 2019, Telefónica Celular, S.A. de C.V. entered into a new credit agreement with Banco Industrial S.A. and Banco Pais S.A for an amount up to $185 million, in tranches of $100 million, $60 million and $25 million. The Loan Agreement has a 10- year maturity and an interest rate of LIBOR plus 3.80% per annum, subject to a floor of minimum 5.25%. The new credit agreement has been used to consolidate the portion of a syndicated $250 million facility with Scotiabank dated March 27, 2015, and $90 million credit agreement with Banco Industrial S.A. dated March 20, 2018. On September 19, 2019, Navega S.A. de C.V., entered into new facility agreement with Banco Industrial S.A. for an amount of $20 million and a duration of 10 years. The new agreement bears an annual interest of LIBOR plus 3.80% , subject to a floor of 5.25%. and will be used to refinance the portion corresponding to it as borrower under the $250 million facility with Scotiabank dated March 27, 2015.

Ghana

As mentioned in note A.1.3., in 2017 Millicom and Airtel signed a Combination Agreement, whereby both investors decided to combine their respective subsidiaries in Ghana, namely Tigo Ghana Limited and Airtel Ghana Limited under an existing company – Bharti Airtel Ghana Holdings B.V. (the ‘JV’ or ‘AirtelTigo Ghana’) both Millicom and Airtel each owning 50%. As part of the transaction, the government of Ghana retained an option to acquire a 25% stake in the newly combined entity for a period of two years. This option has never been material and expired unexercised in September 2019. On October 12, 2017, both parties announced the completion of the transaction. As consideration received, each party owns 50% of the equity capital and voting rights of the JV, and Millicom holds a $40 million loan against Tigo Ghana (the “Millicom Note”), which

149 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

shall rank in priority to all other obligations of the joint venture owed to its shareholders. The Millicom Note bears interest and is classified under ‘other non-current assets’ in the statement of financial position. Decisions about the relevant activities require the unanimous consent of the parties sharing control. Therefore, based on IFRS 11, this agreement results in Millicom and Airtel having joint control over the combined entity, which is a joint venture. Millicom therefore uses the equity method to account for its investment in the combined entity since October 12, 2017. As a consequence, on October 12, 2017, Millicom deconsolidated its investments in Ghana operations and accounted for its investment in the combined entity under the equity method, initially at fair value of $102 million, resulting in a net gain on the deconsolidation of these operations amounting to $36 million, including recycling of foreign currency exchange losses accumulated in equity of $79 million. The net gain has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’.

AirtelTigo Ghana

2019 2018 2017 (US$ (US$ (US$ millions) millions) millions) Revenue...... 142 187 58 Depreciation and amortization...... (69) (110) (11) Operating loss...... (72) (100) (1) Financial income (expenses), net ...... (77) (42) (10) Loss before taxes ...... (123) (135) (12) Charge for taxes, net ...... — —— Loss for the period ...... (123) (135) (12) Net loss for the period attributable to Millicom...... (40) (68) (6) Dividends and advances paid to Millicom...... — —— Total non-current assets (excluding goodwill)...... 168 277 184 Total non-current liabilities...... 245 277 214 Total current assets...... 42 71 60 Total current liabilities...... 187 134 106 Total net assets...... (223) (63) (76) Group's share in % ...... 50% 50% 50% Group's share in USD millions...... (111) (31) (38) Goodwill and consolidation adjustments...... 90 63 134 Unrecognised losses ...... (22) 0 0 Carrying value of investment in joint venture...... — 32 96

Cash and cash equivalents ...... 5 19 15 Debt and financing – non-current...... 245 276 145 Debt and financing – current...... 27 17 —

Net cash from operating activities...... (5) (19) 13 Net cash from (used in) investing activities...... — (8)— Net cash from (used in) financing activities ...... (6) 42 (3) Net increase in cash and cash equivalents...... (11) 15 10

A.2.3. Impairment of investment in joint ventures

While no impairment triggers were identified for the Group’s investments in joint ventures in 2019, according to its policy, management have completed an impairment test for its joint ventures in Guatemala, Honduras and Ghana (up to 2018 for Ghana as investment is nil as of December 31, 2019). The Group’s investments in Guatemala and Honduras operations were tested for impairment by assessing their recoverable amount (using a value in use model based on discounted cash flows) against their carrying amounts. The cash flow projections used were extracted from financial budgets approved by management and the Board covering a period of five years. In respect of Guatemala

150 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

and Honduras, cash flows beyond this period have been extrapolated using a perpetual growth rate of 1.1%–1.2% (2018: 3.2%– 3.0%). Discount rates used in determining recoverable amounts were 9.5% and 9.7%, respectively (2018: 11.0% and 10.3%). For Ghana, in 2018, management used a perpetual growth rate of 3.8% and a discount rate of 14.4%. For the year ended December 31, 2019 and 2018, and as a result of the impairment testing described above, management concluded that none of the Group’s investments in joint ventures should be impaired. Sensitivity analysis was performed on key assumptions within the impairment tests. The sensitivity analysis determined that sufficient headroom exists from realistic changes to the assumptions that would not impact the overall results of the testing.

151 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A.3. Investments in associates

Millicom’s investments in Helios Towers Africa Ltd (HTA) and in the African online business (AIH) became listed companies during 2019, and Millicom resigned from its board of directors' positions in both companies, having as an effect the loss of its significant influence. Both investments are now accounted for as equity instruments (see note C.7.3.). Millicom has significant influence over other immaterial associates as shown below. The Group’s associates are as follows:

December December 31, 2019 31, 2018 Entity Country Activity(ies) % holding % holding Africa Helios Towers Africa Ltd (HTA)(i)...... Mauritius Holding of Tower infrastructure — 22.83 company Africa Internet Holding GmbH (AIH)(i) ...... Germany Online marketplace, retail and — 10.15 services West Indian Ocean Cable Company Limited (WIOCC)..... Republic of 9.1 9.1 Mauritius Telecommunication carriers’ carrier Latin America MKC Brilliant Holding GmbH (LIH) Germany Online marketplace, retail and 35.0 35.0 services Unallocated Milvik AB ...... Sweden Other 11.4 12.3

(i) See note C.7.3.. At December 31, 2019 and 2018, the carrying value of Millicom’s main associates was as follows:

Carrying value of investments in associates at December 31

2019 2018 (US$ millions) African Internet Holding GmbH (AIH)...... — 38 Helios Tower Africa Ltd (HTA)...... — 105 Milvik AB...... 11 13 West Indian Ocean Cable Company Limited (WIOCC) ...... 14 14 Total 25 169

The summarized financial information for the Group’s main material associates is provided below.

Summary of statement of financial position of associates at December 31,

2018 (i)

Total current assets...... 473 Total non-current assets ...... 717 Total assets...... 1,190 Total current liabilities ...... 343 Total non-current liabilities...... 627 Total liabilities...... 969 Total net assets...... 221 Millicom’s carrying value of its investment in HTA and AIH...... 142 Millicom’s carrying value of its investment in other associates...... 27 Millicom’s carrying value of its investment in associates...... 169

152 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

(i) The summarized financial information in 2018 includes HTA and AIH. For 2019, Millicom does not disclose such information as its remaining associates are immaterial to the Group.

Profit (loss) from other joint ventures and associates

In 2019, the loss shown under this caption in the statement of income mainly relates to the net losses recognised by our joint venture in Ghana. For further details refer to note A.2..

2018 (i) 2017 (i)

Revenue...... 511 449 Operating expenses ...... (459) (321) Operating profit (loss) ...... (214) (148) Net loss for the year...... (327) (220) Millicom’s share of results from HTA and AIH...... (66) (34) Millicom’s share of results from other associates...... (2) (45) Millicom’s share of results from other joint ventures (Ghana) ...... (68) (6) Millicom’s share of results from other joint ventures and associates ...... (136) (85)

(i) The summarized financial information in 2018 and 2017 includes HTA and AIH. For 2019, Millicom does not disclose such information as its remaining associates are immaterial to the Group. A.3.1. Accounting for investments in associates

The Group accounts for associates in the same way as it accounts for joint ventures.

A.3.2. Acquisitions and disposals of interests in associates

Milvik AB (BIMA) On December 19, 2017, Millicom announced that it had sold a portion of its ownership stake in BIMA - a leading emerging market insurance player - (from 20.4% to 12.0% – on a fully diluted basis) to Kinnevik and a new investor, with the latter contributing $97 million in the micro-insurance business. As a result of the transaction, Millicom received $24 million in cash and recognized a gain on disposal of $21 million. In addition, and as a consequence of the subsequent capital increase made by the new investor, the Group recognized a gain on dilution of $11 million. Both gains have been recorded under the caption "Income (loss) from other joint ventures and associates, net", in the statement of income for the year ended December 31, 2017. Both transactions were carried out at the same fair value on an arm’s length basis. MKC Brilliant Holding GmbH (LIH) Millicom’s 35.0% investment in LIH has been fully impaired in two stages (by $40 million in 2016 and $48 million in 2017) mainly as a result of the decrease in fair value of LIH’s investment in the Global Fashion Group and the results the annual impairment test conducted in 2017. The impairment test performed in 2019 confirms this conclusion. These losses were recorded under the caption 'Income (loss) from other joint ventures and associates, net' in the year ended December 31, 2017.

A.4. Discontinued operations

A.4.1. Classification of discontinued operations

Discontinued operations are those which have identifiable operations and cash flows (for both operating and management purposes) and represent a major line of business or geographic area which has been disposed of, or are held for sale. Revenue and expenses associated with discontinued operations are presented retrospectively in a separate line in the consolidated statement of income. Millicom determined that the loss of path to control of operations by the termination of a contractual arrangement (e.g. termination without exercise of an unconditional call option agreement giving path to control, as occurred with the Guatemala and Honduras operations) does not require presentation as a discontinued operation.

A.4.2. Millicom’s discontinued operations

In accordance with IFRS 5, the Group’s businesses in Chad, Senegal, Tigo Ghana and Tigo Rwanda have been classified as assets held for sale (respectively on June 5, 2019, February 2, 2017, September 28, 2017 and January 23, 2018) and their results were showed as

153 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

discontinued operations for all years presented in these financial statements. The statement of income comparative figures presented in the notes to these consolidated financial statements have therefore been restated accordingly and when necessary. For further details, refer to note E.4.

B. Performance

B.1. Revenue

Millicom’s revenue comprises sale of services from its mobile business (including Mobile Financial Services - MFS) and its cable and other fixed services, as well as related devices and equipment. Recurring revenue consists of monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, TV services, B2B contracts, MFS commissions and fees from other telecommunications services such as data services, short message services and other value added services.

Revenue from continuing operations by category

2019 2018 2017 (US$ millions) Mobile ...... 2,150 2,126 2,147 Cable and other fixed services ...... 1,928 1,565 1,551 Other ...... 52 43 38 Service revenue...... 4,130 3,734 3,737 Telephone and equipment and other...... 206 212 199 Total revenue...... 4,336 3,946 3,936

Revenue from continuing operations by country or operation (i)

2019 2018 2017 (US$ millions) Colombia...... 1,532 1,661 1,739 Paraguay...... 609 679 662 Bolivia...... 639 614 555 El Salvador ...... 386 405 422 Tanzania...... 382 399 384 Nicaragua...... 157 13 13 Costa Rica...... 153 155 153 Panama...... 475 17 — Other operations...... 2 5 7 Total ...... 4,336 3,946 3,936

(i) The revenue figures above are shown after intercompany eliminations.

B.1.1. Accounting for revenue

Revenue recognition Revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group applies the following practical expedients foreseen in IFRS 15: • No adjustment to the transaction price for the means of a financing component whenever the period between the transfer of a promised good or service to a customer and the associated payment is one year or less; when the period is more than one year the financing component is adjusted, if material.

154 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

• Disclosure in the Group Financial Statements the transaction price allocated to unsatisfied performance obligations only for contracts that have an original expected duration of more than one year (e.g. unsatisfied performance obligations for contracts that have an original duration of one year or less are not disclosed). • Application of the practical expedient not to disclose the price allocated to unsatisfied performance obligations, if the consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e, if billing corresponds to accounting revenue). • Application of the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. Post-paid connection fees are derived from the payment of a non-refundable / one-time fee charged to customer to connect to the network (e.g. connection / installation fee). Usually, it does not represent a distinct good or service, and therefore does not give rise to a separate performance obligation and revenue is recognized over the minimum contract duration. However, if the fee is paid by a customer to get the right to receive goods or services without having to pay this fee again over his tenure with the Group (e.g. the customer can readily extend his contract without having to pay the same fee again), it is accounted for as a material right and revenue should be recognized over the customer retention period. Post-paid mobile / cable subscription fees are recognized over the relevant enforceable/subscribed service period (recurring monthly access fees that do not vary based on usage). The service provision is usually considered as a series of distinct services that have the same pattern of transfer to the customer. Remaining unrecognized subscription fees, which are not refunded to the customers, are fully recognized once the customer has been disconnected. Prepaid scratch / SIM cards are services where customers purchase a specified amount of airtime or other credit in advance. Revenue is recognized as the credit is used. Unused credit is carried in the statement of financial position as a contract liability. Upon expiration of the validity period, the portion of the contract liability relating to the expiring credit is recognized as revenue, since there is no longer an obligation to provide those services. Telephone and equipment sales are recognized as revenue once the customer obtains control of the good. That criteria is fulfilled when the customer has the ability to direct the use and obtain substantially all of the remaining benefits from that good. Revenue from provision of Mobile Financial Services (MFS) is recognized once the primary service has been provided to the customer. Customer premise equipment (CPE) are provided to customers as a prerequisite to receive the subscribed Home services and shall be returned at the end of the contract duration. Since CPEs provided over the contract term do not provide benefit to the customer on their own, they do not give rise to separate performance obligations and therefore are accounted for as part of the service provided to the customers. Bundled offers are considered arrangements with multiple deliverables or elements, which can lead to the identification of separate performance obligations. Revenue is recognized in accordance with the transfer of goods or services to customers in an amount that reflects the relative standalone selling price of the performance obligation (e.g. sale of telecom services, revenue over time + sale of handset, revenue at a point in time). Principal-Agent, some arrangements involve two or more unrelated parties that contribute to providing a specified good or service to a customer. In these instances, the Group determines whether it has promised to provide the specified good or service itself (as a principal) or to arrange for those specified goods or services to be provided by another party (as an agent). For example, performance obligations relating to services provided by third-party content providers (i.e., mobile Value Added Services or “VAS”) or service providers (i.e., wholesale international traffic) where the Group neither controls a right to the provider’s service nor controls the underlying service itself are presented net because the Group is acting as an agent. The Group generally acts as a principal for other types of services where the Group is the primary obligor of the arrangement. In cases the Group determines that it acts as a principal, revenue is recognized in the gross amount, whereas in cases the Group acts as an agent revenue is recognized in the net amount. Revenue from the sale of cables, fiber, wavelength or capacity contracts, when part of the ordinary activities of the operation, is recognized as recurring revenue. Revenue is recognized when the cable, fiber, wavelength or capacity has been delivered to the customer, based on the amount expected to be received from the customer. Revenue from operating lease of tower space is recognized over the period of the underlying lease contracts. Finance leases revenue is apportioned between lease of tower space and interest income. Significant judgments The determination of the standalone selling price for contracts that involve more than one performance obligation may require significant judgment, such as when the selling price of a good or service is not readily observable.

155 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The Group determines the standalone selling price of each performance obligation in the contract in accordance to the prices that the Group would apply when selling the same services and/or telephone and equipment included in the obligation to a similar customer on a standalone basis. When standalone selling price of services and/or telephone and equipment are not directly observable, the Group maximizes the use of external input and uses the expected cost plus margin approach to estimate the standalone selling price.

B.2. Expenses

The cost of sales and operating expenses incurred by the Group can be summarized as follows:

Cost of sales

2019 2018 2017 (US$ millions) Direct costs of services sold ...... (878) (799) (881) Cost of telephone, equipment and other accessories...... (230) (229) (217) Bad debt and obsolescence costs...... (93) (90) (71) Cost of sales...... (1,201) (1,117) (1,169)

Operating expenses, net

2019 2018 2017 (US$ millions) Marketing expenses...... (402) (391) (448) Site and network maintenance costs ...... (245) (192) (178) Employee related costs (B.4.)...... (496) (500) (434) External and other services...... (204) (181) (163) Rentals and (operating) leases (i)...... (1) (152) (151) Other operating expenses...... (257) (201) (156) Operating expenses, net...... (1,604) (1,616) (1,531)

(i) Decrease is due to IFRS 16 application - see further explanations above in "New and amended IFRS accounting standards" section The other operating income and expenses incurred by the Group can be summarized as follows:

Other operating income (expenses), net

Notes 2019 2018 2017 (US$ millions) Income from tower deal transactions C.3.4. 5 61 63 Impairment of intangible assets and property, plant and equipment ...... E.1., E.2. (8) (6) (12) Gain (loss) on disposals of intangible assets and property, plant and equipment...... — 7 1 Loss on disposal of equity investments...... C.7.3. (32) — — Other income (expenses)...... 1 13 17 Other operating income (expenses), net...... (34) 75 69

B.2.1. Accounting for cost of sales and operating expenses

Cost of sales Cost of sales is recorded on an accrual basis.

156 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Incremental costs of obtaining a contract Incremental costs of obtaining a contract, including dealer commissions, are capitalized as Contract Costs in the statement of financial position and amortized in operating expenses over the expected benefit period, which is based on the average duration of contracts with customer (see practical expedient in note B.1.1.). Operating leases - until 2018 year-end Operating leases were all leases that did not qualify as finance leases. Operating lease payments were recognized as expenses in the consolidated statement of income on a straight-line basis over the lease term.

B.3. Segmental information

Management determines operating and reportable segments based on information used by the chief operating decision maker (CODM) to make strategic and operational decisions from both a business and geographic perspective. The Group’s risks and rates of return are predominantly affected by operating in different geographical regions. The Group has businesses in two main regions: Latin America ("Latam") and Africa. The Latam figures below include Honduras and Guatemala as if they are fully consolidated by the Group, as this reflects the way management reviews and uses internally reported information to make decisions. Honduras and Guatemala are shown under the Latam segment. The joint venture in Ghana is not reported as if fully consolidated. Revenue, operating profit (loss), EBITDA and other segment information for the years ended December 31, 2019, 2018 and 2017, were as follows:

Guatemala Eliminations Latin and and America Africa Unallocated Honduras(vii) Transfers Total (US$ millions) Year ended December 31, 2019 Mobile revenue...... 3,258 372 — (1,480) — 2,150 Cable and other fixed services revenue...... 2,197 9 — (277) — 1,928 Other revenue ...... 60 1 — (8) — 52 Service revenue (i)...... 5,514 382 — (1,766) — 4,130 Telephone and equipment and other revenue (i)...... 449 — — (243) — 206 Revenue...... 5,964 382 — (2,009) — 4,336 Operating profit (loss)...... 1,006 24 (94) (540) 179 575 Add back: Depreciation and amortization...... 1,435 99 9 (444) — 1,100 Share of profit in joint ventures in Guatemala and Honduras...... — — — — (179) (179) Other operating income (expenses), net...... 2 (2) 42 (8) — 34 EBITDA (ii)...... 2,443 122 (43) (992) — 1,530 EBITDA from discontinued operations...... — (3) — — — (3) EBITDA incl discontinued operations ...... 2,443 119 (43) (992) — 1,527 Capital expenditure (iii)...... (1,040) (58) (9) 261 — (846) Changes in working capital and others (iv) ...... (86) 14 (52) (18) — (143) Taxes paid...... (225) (10) (8) 129 — (114) Operating free cash flow (v) ...... 1,093 64 (112) (619) — 425 Total Assets (vi) ...... 13,821 936 3,715 (5,465) (151) 12,856 Total Liabilities...... 8,374 909 3,977 (2,119) (965) 10,176

157 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Guatemala Eliminations Latin and and America Africa Unallocated Honduras(vii) Transfers Total (US$ millions) Year ended December 31, 2018 (viii) Mobile revenue...... 3,214 388 — (1,475) — 2,126 Cable and other fixed services revenue...... 1,808 10 — (253) — 1,565 Other revenue ...... 48 1 — (6) — 43 Service revenue (i)...... 5,069 398 — (1,734) — 3,734

Telephone and equipment revenue (i)...... 415 — — (203) — 212 Revenue...... 5,485 399 — (1,937) — 3,946 Operating profit (loss)...... 995 25 (47) (488) 154 640 Add back: Depreciation and amortization...... 1,133 80 5 (416) — 803 Share of profit in joint ventures in Guatemala and Honduras...... — — — — (154) (154) Other operating income (expenses), net...... (51) (3) (2) (19) — (75) EBITDA (ii)...... 2,077 102 (44) (922) — 1,213 EBITDA from discontinued operations...... — 44 — — — 44 EBITDA incl discontinued operations ...... 2,077 146 (44) (922) — 1,257 Capital expenditure (iii)...... (872) (59) (2) 225 — (708) Changes in working capital and others (iv) ...... (42) 28 13 (12) — (13) Taxes paid...... (264) (24) (6) 142 — (153) Operating free cash flow (v) ...... 899 91 (39) (568) — 383 Total Assets (vi) ...... 11,751 839 2,752 (5,219) 190 10,313 Total Liabilities...... 6,127 905 2,953 (1,814) (650) 7,521

158 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Guatemala Eliminations Latin and and America Africa Unallocated Honduras(vii) Transfers Total (US$ millions) Year ended December 31, 2017 (viii) Mobile revenue 3,283 374 — (1,510) — 2,147 Cable and other fixed services revenue 1,755 9 — (213) — 1,551 Other revenue 40 2 — (4) — 38 Service revenue (i) 5,078 385 — (1,727) — 3,737

Telephone and equipment revenue (i) 363 1 — (165) — 199 Total Revenue 5,441 386 — (1,892) — 3,936 Operating profit (loss) 899 28 (5) (431) 140 632 Add back: Depreciation and amortization 1,174 81 6 (450) — 812 Share of profit in joint ventures in Guatemala and Honduras — — — — (140) (140) Other operating income (expenses), net (49) (11) 10 (18) — (69) EBITDA (ii) 2,024 97 12 (898) — 1,236 EBITDA from discontinued operations — 115 — — — 115 EBITDA incl discontinued operations 2,024 212 12 (898) — 1,351 Capital expenditure (iii) (855) (99) (1) 237 — (718) Changes in working capital and others (iv) (53) (6) (10) 27 — (43) Taxes paid (239) (18) 1 124 — (132) Operating free cash flow (v) 877 89 2 (511) 1 459 Total Assets (vi) 10,411 1,482 598 (5,420) 2,393 9,464 Total Liabilities 5,484 1,673 1,465 (1,961) (478) 6,183

(i) Service revenue is Group revenue related to the provision of ongoing services such as monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data services, SMS and other value-added services excluding telephone and equipment sales. Revenues from other sources comprises rental, sub-lease rental income and other non recurring revenues. The Group derives revenue from the transfer of goods and services over time and at a point in time. Refer to the table below. (ii) EBITDA is operating profit excluding impairment losses, depreciation and amortization and gains/losses on the disposal of fixed assets. EBITDA is used by the management to monitor the segmental performance and for capital management. For the year ended December 31, 2019, the application of IFRS 16 had a positive impact on EBITDA as compared to what our results would have been if we had continued to follow the IAS 17 standard. (iii) Cash spent for capex excluding spectrum and licenses of $59 million (2018: $61 million; 2017: $53 million) and cash received on tower deals of $22 million (2018: $141 million; 2017: $161 million). (iv) Changes in working capital and others include changes in working capital as stated in the cash flow statement, as well as share-based payments expense and non-cash bonuses. (v) Operating Free Cash Flow is EBITDA less cash capex (excluding spectrum and license costs) less change in working capital, other non-cash items (share- based payment expense and non-cash bonuses) and taxes paid. (vi) Segment assets include goodwill and other intangible assets. (vii) Including eliminations for Guatemala and Honduras as reported in the Latam segment. (viii) Restated as a result of classification of certain of our African operations as discontinued operations (see notes A.4. and E.4.).

159 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Revenue from contracts with customers from continuing operations:

Twelve months ended December 31, 2019 Twelve months ended December 31, 2018

Timing of revenue Latin Latin $ millions recognition America Africa Total Group America Africa Total Group Mobile Over time 1,747 261 2,007 1,701 280 1,981

Mobile Financial Services Point in time 31 112 143 37 108 145 Cable and other fixed services Over time 1,919 9 1,928 1,556 10 1,565 Other Over time 51 1 52 42 1 43 Service Revenue 3,748 382 4,130 3,336 398 3,734

Telephone and equipment Point in time 206 — 206 212 — 212 Revenue from contracts with customers 3,954 382 4,336 3,548 399 3,946

B.4. People

Number of permanent employees

2019 2018 2017 Continuing operations(i)...... 17,687 16,725 14,134 Joint ventures (Guatemala, Honduras and Ghana)...... 4,688 4,416 4,326 Discontinued operations...... — 262 667 Total ...... 22,375 21,403 19,127

(i) Emtelco headcount are excluded from this disclosure and any internal reporting because their costs are classified as direct costs and not employee related costs.

Notes 2019 2018 2017 (US$ millions) Wages and salaries...... (358) (346) (308) Social security ...... (68) (60) (56) Share based compensation ...... B.4.1. (27) (21) (22) Pension and other long-term benefit costs ...... B.4.2. (4) (7) (8) Other employees related costs...... (39) (67) (41) Total ...... (496) (500) (434)

B.4.1. Share-based compensation

Millicom shares granted to management and key employees includes share-based compensation in the form of long-term share incentive plans. Since 2016, Millicom has two types of annual plans, a performance share plan and a deferred share plan. The different plans are further detailed below.

160 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Cost of share based compensation

2019 2018 2017 (US$ millions) 2016 incentive plans — (4) (6) 2017 incentive plans (7) (8) (12) 2018 incentive plans (8) (11) — 2019 incentive plans (14) — — Total share based compensation (27) (21) (22)

Deferred share plan (unchanged since 2014, except for vesting schedule) Until 2018 deferred awards plan, participants were granted shares based on past performance, with 16.5% of the shares vesting on January 1 of each of year one and two, and the remaining 67% on 1 January of year three. Beginning with the 2019 plan, while all other guidelines remain the same, shares vest with 30% on January 1 of each of year one and two, and the remaining 40% on 1 January of year three. Vesting is conditional upon the participant remaining employed with Millicom at each vesting date. The cost of this long-term incentive plan, which is not conditional on performance conditions, is calculated as follows: Fair value (share price) of Millicom’s shares at grant date x number of shares expected to vest. Performance share plan (issued in 2015) Under this plan, shares granted did vest in full in 2019, subject to performance conditions, 62.5% based on Absolute Total Shareholder Return (TSR) and 37.5% based on actual vs budgeted EBITDA minus CAPEX minus Change in Working Capital (Free Cash Flow). As the TSR measure is a market condition, the fair value of the shares in the performance share plan requires consideration of potential adjustments for future market-based conditions at grant date. For this, a specific valuation had been performed at grant date based on the probability of the TSR conditions being met (and to which extent) and the expected payout based upon leaving conditions. The Free Cash Flows (FCF) condition is a non-market measure which had been considered together with the leaving estimate and based initially on a 100% fulfillment expectation. The reference share price for 2015 performance share plan is the same share price as the share price for the deferred share plan. Performance share plan (for plans issued in 2016 and 2017) Shares granted under this performance share plan vest at the end of the three-year period, subject to performance conditions, 25% based on Positive Absolute Total Shareholder Return (Absolute TSR), 25% based on Relative Total Shareholder Return (Relative TSR) and 50% based on budgeted Earnings Before Interest Tax Depreciation and Amortization (EBITDA) minus Capital Expenditure (Capex) minus Change in Working Capital (CWC) (Free Cash Flow). As the TSRs measures are market conditions, the fair value of the shares in the performance share plan requires consideration of potential adjustments for future market-based conditions at grant date. For this, a specific valuation had been performed at grant date based on the probability of the TSR conditions being met (and to which extent) and the expected payout based upon leaving conditions. The Free Cash Flows (FCF) condition is a non-market measure which had been considered together with the leaving estimate and based initially on a 100% fulfillment expectation. The reference share price for this condition is the same share price as the share price for the deferred share plan above. Performance share plan (for plans issued from 2018) Shares granted under this performance share plan vest at the end of the three-year period, subject to performance conditions, 25% based on Relative Total Shareholder Return (“Relative TSR”), 25% based on the achievement of the Service Revenue target measured on a 3-year CAGRs from year one to year three of the plan (“Service Revenue”) and 50% based on the achievement of the Operating Free Cash Flow (“Operating Free Cash Flow”) target measured on a 3-year CAGRs from year one to year three of the plan. For the performance share plans, and in order to calculate the fair value of the TSR portion of those plans, it is necessary to make a number of assumptions which are set out below. The assumptions have been set based on an analysis of historical data as at grant date.

161 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Assumptions and fair value of the shares under the TSR portion(s)

Risk-free Dividend Share price Award term Share fair rate % yield % volatility(i) % (years) value (in US$) Performance share plan 2019 (Relative TSR) ...... (0.24) 3.01 26.58 2.93 49.79 Performance share plan 2018 (Relative TSR) ...... (0.39) 3.21 30.27 2.93 57.70 Performance share plan 2017 (Relative TSR) ...... (0.40) 3.80 22.50 2.92 27.06 Performance share plan 2017 (Absolute TSR) ...... (0.40) 3.80 22.50 2.92 29.16 Performance share plan 2016 (Relative TSR) ...... (0.65) 3.49 30.00 2.61 43.35 Performance share plan 2016 (Absolute TSR) ...... (0.65) 3.49 30.00 2.61 45.94 Performance share plan 2015 (Absolute TSR) ...... (0.32) 2.78 23.00 2.57 32.87 Executive share plan 2015 – Component A...... (0.32) N/A 23.00 2.57 53.74 Executive share plan 2015 – Component B ...... (0.32) N/A 23.00 2.57 29.53

(i) Historical volatility retained was determined on the basis of a three-year historic average. The cost of the long-term incentive plans which are conditional on market conditions is calculated as follows: Fair value (market value) of shares at grant date (as calculated above) x number of shares expected to vest. The cost of these plans is recognized, together with a corresponding increase in equity (share compensation reserve), over the period in which the performance and/or employment conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award. Adjustments are made to the expense recorded for forfeitures, mainly due to management and employees leaving Millicom. Non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. These are treated as vested, regardless of whether or not the market conditions are satisfied, provided that all other performance conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified. In addition, an expense is recognized for any modification that increases the total fair value of the share based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

Plan awards and shares expected to vest

2019 plans 2018 plans 2017 plans 2016 plans Performa Deferred Performa Deferred Performa Deferred Performa Deferred nce plan plan nce plan plan nce plan plan nce plan plan (number of shares) Initial shares granted 257,601 320,840 237,196 262,317 279,807 438,505 200,617 287,316 Additional shares granted(i) — 20,131 — 3,290 2,868 29,406 — — Revision for forfeitures (17,182) (9,198) (27,494) (26,860) (40,946) (88,437) (49,164) (78,253) Revision for cancellations — — (4,728)————— Total before issuances 240,419 331,773 204,974 238,747 241,729 379,474 151,453 209,063 Shares issued in 2017 — — — — — (2,686) (1,214) (1,733) Shares issued in 2018 — — (97) (18,747) (2,724) (99,399) (752) (43,579) Shares issued in 2019 (150) (24,294) (3,109) (54,971) (19,143) (82,486) (149,487) (163,751) Shares still expected to vest 240,269 307,479 201,768 165,029 219,862 194,903 — — Estimated cost over the vesting period (US$ millions) 11 18 12 14 10 20 8 12

(i) Additional shares granted represent grants made for new joiners and/or as per CEO contractual arrangements.

162 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

B.4.2. Pension and other long-term employee benefit plans

Pension plans The pension plans apply to employees who meet certain criteria (including years of service, age and participation in collective agreements). Pension and other similar employee related obligations can result from either defined contribution plans or defined benefit plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. No further payment obligations exist once the contributions have been paid. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in future payments is available. Defined benefit pension plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of the defined benefit pension plan is the present value of the defined benefit obligation at the statement of financial position date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using an appropriate discount rate based on maturities of the related pension liability. Re-measurement of net defined benefit liabilities are recognized in other comprehensive income and not reclassified to the statement of income in subsequent years. Past service costs are recognized in the statement of income on the earlier of the date of the plan amendment or curtailment, and the date that the Group recognizes related restructuring costs. Net interest is calculated by applying the discount rate to the net defined benefit asset/liability. Long-service plans Long-service plans apply for Colombian subsidiary UNE employees with more than five years of service whereby additional bonuses are paid to employees that reach each incremental length of service milestone (from five to 40 years). Termination plans In addition, UNE has a number of employee defined benefit plans. The level of benefits provided under the plans depends on collective employment agreements and Colombian labor regulations. There are no defined assets related to the plans, and UNE make payments to settle obligations under the plans out of available cash balances. At December 31, 2019, the defined benefit obligation liability amounted to $59 million (2018: $60 million) and payments expected in the plans in future years totals $106 million (2018: $111 million). The average duration of the defined benefit obligation at December 31, 2019 is 6 years (2018: 7 years). The termination plans apply to employees that joined UNE prior to December 30, 1996. The level of payments depends on the number of years in which the employee has worked before retirement or termination of their contract with UNE. Except for the UNE pension plan described above, there are no other significant defined benefits plans in the Group.

B.4.3. Directors and executive management

The remuneration of the members of the Board of Directors comprises an annual fee and shares. Director remuneration is proposed by the Nomination Committee and approved by the shareholders at their Annual General Meeting (AGM).

Remuneration charge for the Board (gross of withholding tax)

2019 2018 2017 (US$ ’000) Chairperson...... 366 169 233 Other members of the Board...... 1,557 774 889 Total (i)...... 1,923 943 1,122

(i) Cash compensation converted from SEK to USD at exchange rates on payment dates for 2017 and 2018, in 2019 cash compensation was denominated in USD. Share based compensation based on the market value of Millicom shares on the corresponding AGM date (2019: in total 19,483 shares; 2018: in total 6,591 shares; 2017: in total 8,731 shares). Net remuneration comprised 73% in shares and 27% in cash (SEK) (2018: 51% in shares and 49% in cash; 2017: 52% in shares and 48% in cash).

163 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Shares beneficially owned by the Directors

2019 2018 (number of shares) Chairperson...... 5,814 8,554 Other members of the Board...... 32,279 15,333 Total (i) ...... 38,093 23,887

The remuneration of executive management of Millicom comprises an annual base salary, an annual bonus, share based compensation, social security contributions, pension contributions and other benefits. Bonus and share based compensation plans (see note B.4.1.) are based on actual and future performance. Share based compensation is granted once a year by the Compensation Committee of the Board. If the employment of Millicom’s senior executives is terminated, severance of up to 12 months’ salary is potentially payable. The annual base salary and other benefits of the Chief Executive Officer (CEO) and the Executive Vice Presidents (Executive team) are proposed by the Compensation Committee and approved by the Board.

Remuneration charge for the Executive Team

Executive Team (8 CEO CFO members)(iii) (US$ ’000) 2019 Base salary ...... 1,167 654 3,498 Bonus...... 1,428 626 2,098 Pension ...... 279 98 798 Other benefits...... 50 260 1,521 Termination benefits...... — — 863 Total before share based compensation...... 2,924 1,639 8,779 Share based compensation(i)(ii) in respect of 2019 LTIP...... 5,625 1,576 5,965 Total ...... 8,549 3,215 14,743

Remuneration charge for the Executive Team

Executive Team (9 CEO CFO members) (US$ ’000) 2018 Base salary ...... 1,112 673 3,930 Bonus...... 1,492 557 2,445 Pension ...... 247 101 962 Other benefits...... 66 63 805 Termination benefits...... — — 301 Total before share based compensation...... 2,918 1,393 8,444 Share based compensation(i)(ii) in respect of 2018 LTIP...... 5,027 1,567 4,957 Total ...... 7,945 2,960 13,401

164 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Remuneration charge for the Executive team

Executive team CEO CFO (9 members) (US$ ’000) 2017 Base salary 1,000 648 3,822 Bonus 707 455 1,590 Pension 150 97 628.5 Other benefits 64 15 1,192.5 Total before share based compensation 1,921 1,215 7,233 Share based compensation(i)(ii) in respect of 2017 LTIP 2,783 1,492 5,202 Total 4,704 2,707 12,435

(i) See note B.4.1. (ii) Share awards of 102,122 and 135,480 were granted in 2019 under the 2019 LTIPs to the CEO, and Executive Team (2018: 80,264 and 112,472, respectively; 2017: 61,724 and 167,371, respectively). (iii) Other Executives’ compensation includes Daniel Loria, former CHRO and Rodrigo Diehl, EVP Strategy.

Share ownership and unvested share awards granted from Company equity plans to the Executive team

Executive CEO team Total (number of shares) 2019 Share ownership (vested from equity plans and otherwise acquired) ...... 190,577 136,306 326,883 Share awards not vested ...... 236,211 334,193 570,404 2018 Share ownership (vested from equity plans and otherwise acquired) ...... 122,310 84,782 207,092 Share awards not vested ...... 172,485 339,726 512,211

B.5. Other non-operating (expenses) income, net

Non-operating items mainly comprise changes in fair value of derivatives and the impact of foreign exchange fluctuations on the results of the Group.

Year ended December 31, 2019 2018 2017 (US$ millions) Change in fair value of derivatives (see note C.7.2.) — (1) (22) Change in fair value in investment in Jumia (C.7.3.) (38) — — Change in fair value in investment in HT (C.7.3.) 312 — — Change in value of put option liability (C.7.4.) (25) — — Exchange gains (losses), net (32) (40) 21 Other non-operating income (expenses), net 10 2 — Total 227 (39) (2)

Foreign exchange gains and losses Transactions denominated in a currency other than the functional currency are translated into the functional currency using exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions, and on translation of monetary assets and liabilities denominated in currencies other than the functional currency at

165 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

year-end exchange rates, are recognized in the consolidated statement of income, except when deferred in equity as qualifying cash flow hedges.

B.6. Taxation

B.6.1. Income tax expense

Tax mainly comprises income taxes of subsidiaries and withholding taxes on intragroup dividends and royalties for use of Millicom trademarks and brands. Millicom operations are in jurisdictions with income tax rates of 10% to 35%levied on either revenue or profit before income tax (2018: 10% to 37%; 2017: 10% to 40%). Income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statement of income. Income tax charge

2019 2018 2017 (US$ millions) Income tax (charge) credit Withholding tax...... (56) (64) (74) Other income tax relating to the current year ...... (88) (82) (81) Adjustments in respect of prior years...... (7) 1 (21) Total (151) (145) (176) Deferred tax (charge) credit Origination and reversal of temporary differences ...... 58 32 15 Effect of change in tax rates...... (8) (10) 19 Tax income (expense) before valuation allowances...... 50 22 34 Effect of valuation allowances...... (9) (8) (28) Total 41 14 6 Adjustments in respect of prior years...... (10) 19 8 31 33 14 Tax (charge) credit on continuing operations ...... (120) (112) (162) Tax (charge) credit on discontinuing operations ...... (2) (4) 4 Total tax (charge) credit ...... (122) (116) (158)

166 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Reconciliation between the tax expense and tax at the weighted average statutory tax rate is as follows: Income tax calculation

2019 2018 2017 Continuin Discontinue Discontinue Discontinue g d Total Continuing d Total Continuing d Total operation operations operations operations operations operations s (US$ millions) Profit before tax...... 218 59 277 119 (29) 90 171 56 227 Tax at the weighted average statutory rate...... (37) (11) (48) (1) — (1) (10) (12) (22) Effect of: Items taxed at a different rate ...... (1) — (1) 7 — 7 (11) — (11) Change in tax rates on deferred tax balances...... (8) — (8) (10) — (10) 19 — 19 Expenditure not deductible and income not taxable...... (37) 9 (28) (59) (2) (61) (64) 5 (59) Unrelieved withholding tax...... (56) — (56) (64) — (64) (73) — (73) Accounting for associates and joint ventures...... 36 — 36 5 — 5 17 — 17 Movement in deferred tax on unremitted earnings ...... 9 — 9 (2) — (2) 1 — 1 Unrecognized deferred tax assets ...... (20) — (20) (8) (2) (10) (29) (12) (41) Recognition of previously unrecognized deferred tax assets...... 11 — 11 — —— 1 13 14 Adjustments in respect of prior years ...... (17) — (17) 20 — 20 (13) 10 (3) Total tax (charge) credit...... (120) (2) (122) (112) (4) (116) (162) 4 (158) Weighted average statutory tax rate ...... 17.0% 17.3% 0.8% 1.1% 5.8% 9.7% Effective tax rate...... 55.0% 44.0% 94.1% 128.9% 94.7% 69.6%

B.6.2. Current tax assets and liabilities

Current tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rate and tax laws used to compute the amount are those enacted or substantively enacted by the statement of financial position date.

B.6.3. Deferred tax

Deferred tax is calculated using the liability method on temporary differences at the statement of financial position date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting, nor taxable profit or loss. Deferred tax assets are recognized for all temporary differences including unused tax credits and tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized, except where the deferred tax assets relate to deductible temporary differences from initial recognition of an asset or liability in a transaction that is

167 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

not a business combination, and, at the time of the transaction, affects neither accounting, nor taxable profit or loss. It is probable that taxable profit will be available when there are sufficient taxable temporary differences relating to the same tax authority and the same taxable entity which are expected to reverse in the same period as the expected reversal of the deductible temporary difference. The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to utilize them. Unrecognized deferred tax assets are reassessed at each statement of financial position date and are recognized to the extent it is probable that future taxable profit will enable the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rate expected to apply in the year when the assets are realized or liabilities settled, based on tax rates and tax laws that have been enacted or substantively enacted at the statement of financial position date. Deferred tax assets and deferred tax liabilities are offset where legally enforceable set off rights exist and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax

Unused tax Unremitted Fixed assets losses earnings Other Offset Total (US$ millions) Balance at December 31, 2017...... 32 52 (32) 72 — 124 (Charge)/credit to income statement ...... (18) (3) (2) 56 — 33 Change in scope ...... (192) — — 8 — (184) Accounting policy changes...... — — — 4 — 4 Exchange differences...... — (5) — (6) — (11) Balance at December 31, 2018...... (178) 44 (34) 134 — (34) Deferred tax assets...... 76 44 — 134 (52) 202 Deferred tax liabilities...... (254) — (34) — 52 (236) Balance at December 31, 2018...... (178) 44 (34) 134 — (34) (Charge)/credit to income statement ...... 41 (15) 8 (3) — 31 Change in scope ...... (82) 5 — 4 — (73) Transfers to assets held for sale...... — — — (3) — (3) Exchange differences...... 2 — — (2) — — Balance at December 31, 2019...... (217) 34 (26) 130 — (79) Deferred tax assets...... 84 34 — 134 (52) 200 Deferred tax liabilities...... (301) — (26) (4) 52 (279) Balance at December 31, 2019...... (217) 34 (26) 130 — (79)

Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

Unused tax Fixed assets losses Other Total (US$ millions) At December 31, 2019...... 92 4,705 126 4,923 At December 31, 2018...... 92 4,886 134 5,112

168 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Unrecognized tax losses carryforward related to continuing operations expire as follows:

2019 2018 2017 (US$ millions) Expiry: Within one year...... 1 0 39 Within one to five years ...... 2 3 494 After five years ...... 493 493 — No expiry...... 4,209 4,390 4,311 Total ...... 4,705 4,886 4,844

With effect from 2017, Luxembourg tax losses incurred may be carried forward for a maximum of 17 years. Losses incurred before 2017 may be carried forward without limitation of time. At December 31, 2019, Millicom had $697 million of unremitted earnings of Millicom operating subsidiaries for which no deferred tax liabilities were recognized (2018: $584 million; 2017: $842 million). Except for intragroup dividends to be paid out of 2019 profits in 2020 for which deferred tax of $26 million (2018: $34 million; 2017 $32 million) has been provided, it is anticipated that intragroup dividends paid in future periods will be made out of profits of future periods.

B.7. Earnings per share

Basic earnings (loss) per share are calculated by dividing net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per share are calculated by dividing the net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of dilutive potential shares. Net profit/(loss) used in the earnings (loss) per share computation

2019 2018 2017 (US$ millions) Basic and Diluted Net profit (loss) attributable to equity holders from continuing operations...... 93 23 28 Net profit (loss) attributable to equity holders from discontinuing operations ...... 57 (33) 59 Net profit attributable to all equity holders to determine the basic earnings (loss) per share...... 149 (10) 87

Weighted average number of shares in the earnings (loss) per share computation

2019 2018 2017 (thousands of shares) Weighted average number of ordinary shares (excluding treasury shares) for basic earnings (loss) per share...... 101,144 100,793 100,384 Potential incremental shares as a result of share options — — Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of dilution 101,144 100,793 100,384 C. Capital structure and financing

C.1. Share capital, share premium and reserves

Common shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds. Where any Group company purchases the Company’s share capital, the consideration paid, including any directly attributable incremental costs, is shown under Treasury shares and deducted from equity attributable to the Company’s equity holders until the

169 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

shares are canceled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental costs and the related income tax effects is included in equity attributable to the Company’s equity holders. Share capital, share premium

2019 2018 Authorized and registered share capital (number of shares)...... 133,333,200 133,333,200 Subscribed and fully paid up share capital (number of shares)...... 101,739,217 101,739,217 Par value per share ...... 1.50 1.50 Share capital (US$ millions)...... 153 153 Share premium (US$ millions)...... 480 482 Total (US$ millions)...... 633 635

Other equity reserves

Equity settled Currency Pension transaction Hedge translation obligation Legal reserve reserve reserve reserve reserve Total (US$ millions) As of January 1, 2017...... 16 43 (4) (616) (1) (562) Share based compensation...... — 22 — — — 22

Issuance of shares – 2014, 2015, 2016 LTIPs ...... — (18) — — — (18) Remeasurements of post-employment benefit obligations...... — — — — (2) (2) Cash flow hedge reserve movement ...... — — 4 — — 4 Currency translation movement...... — — — 85 — 85 As of December 31, 2017...... 16 46 — (531) (3) (472) Share based compensation...... — 22 — — — 22

Issuance of shares –2015, 2016, 2017 LTIPs ...... — (22) — — — (22) Cash flow hedge reserve movement ...... — — (1) — — 1 Currency translation reserved recycled to statement of income ...... — — — — — — Currency translation movement...... — — — (68) — (67) As of December 31, 2018...... 16 47 (1) (599) (3) (538) Share based compensation...... — 29 — — — 29 Issuance of shares –2016, 2017, 2018, 2019 LTIPs ...... — (25) — — — (25) Cash flow hedge reserve movement ...... — — (16) — — (16) Currency translation movement...... — — — (2) — (2) Effect of restructuring in Tanzania ...... — — — 9 — 9 As of December 31, 2019...... 16 52 (18) (593) (2) (544)

170 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.1.1. Legal reserve

If Millicom International Cellular S.A. reports an annual net profit on a non-consolidated basis, Luxembourg law requires appropriation of an amount equal to at least 5% of the annual net profit to a legal reserve until such reserve equals 10% of the issued share capital. This reserve is not available for dividend distribution. No appropriation was required in 2018 or 2019 as the 10% minimum level was reached in 2011 and maintained each subsequent year.

C.1.2. Equity settled transaction reserve

The cost of LTIPs is recognized as an increase in the equity-settled transaction reserve over the period in which the performance and/ or service conditions are rendered. When shares under the LTIPs vest and are issued the corresponding reserve is transferred to share premium.

C.1.3. Hedge reserve

The effective portions of changes in value of cash flow hedges are recorded in the hedge reserve (see note C.1. ).

C.1.4. Currency translation reserve

In the financial statements, the relevant captions in the statements of financial position of subsidiaries without US dollar functional currencies are translated to US dollars using the closing exchange rate. Statements of income or statement of income captions (including those of joint ventures and associates) are translated to US dollars at monthly average exchange rates during the year. The currency translation reserve includes foreign exchange gains and losses arising from these translations. When the Group disposes of or loses control or significant influence over a foreign operation, exchange differences that were recorded in equity are recognized in the consolidated statement of income as part of gain or loss on sale or loss of control and/or significant influence.

C.2. Dividend distributions

On May 2, 2019, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2018, was approved by the shareholders at the AGM and paid in equal portions in May and November 2019. On May 4, 2018, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2017, was approved by the shareholders at the AGM and paid in equal portions in May and November 2018. On May 4, 2017, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2016, was approved by the shareholders at the AGM and distributed in May 2017. The ability of the Company to make dividend payments is subject to, among other things, the terms of indebtedness, legal restrictions and the ability to repatriate funds from Millicom’s various operations. At December 31, 2019, $306 million (December 31, 2018: $324 million; December 31, 2017: $345 million) of Millicom’s retained profits represent statutory reserves that are unavailable to be distributed to owners of the Company.

171 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.3. Debt and financing

Debt and financing by type (i)

Note 2019 2018 (US$ millions) Debt and financing due after more than one year Bonds...... C.3.1. 4,067 2,501 Banks ...... C.3.2. 1,805 1,324 Finance leases (ii) ...... C.3.4. — 353 Other financing (iii) ...... 43 113 Total non-current financing ...... 5,915 4,291 Less: portion payable within one year ...... (129) (168) Total non-current financing due after more than one year...... 5,786 4,123 Debt and financing due within one year Bonds...... C.3.1. 46 — Banks ...... C.3.2. 11 289 Total current debt and financing...... 57 289 Add: portion of non-current debt payable within one year...... 129 168 Total ...... 186 458 Total debt and financing...... 5,972 4,580

(i) See note D.1.1 for further details on maturity profile of the Group debt and financing. (ii) Finance lease liabilities were included in Debt and Financing until 31 December 2018, but were reclassified to lease liabilities on January 1, 2019 when adopting the new leasing standard. See above in the "New and amended IFRS accounting standards" and below in notes C.4. and E.4. for further information about the change in accounting policy for leases. (iii) In July 2018, the Company issued a COP144,054.5 million /$50 million bilateral facility with IIC (Inter-American Development Bank) for a USD indexed to COP Note. The note bears interest at 9.450% p.a.. This COP Note is used as net investment hedge of the net assets of our operations in Colombia.

Debt and financing by location

2019 2018 (US$ millions) Millicom International Cellular S.A. (Luxembourg)...... 2,773 1,770 Colombia...... 827 1,016 Paraguay...... 502 504 Bolivia...... 350 317 Panama ...... 918 261 Tanzania...... 186 201 Chad...... — 64 Costa Rica...... 148 148 El Salvador ...... 268 299 Total debt and financing...... 5,972 4,580

Debt and financings are initially recognized at fair value, net of directly attributable transaction costs. They are subsequently measured at amortized cost using the effective interest rate method or at fair value. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the effective interest rate. Any difference between the initial amount and the maturity amount is recognized in the consolidated statement of income over the period of the borrowing. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least 12 months from the statement of financial position date.

172 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.3.1. Bond financing

Bond financing

Interest Rate Note Country Maturity % 2019 2018 (US$ millions) STIBOR (i) + SEK Variable Rate Notes...... 1 Luxembourg 2024 2.350% 211 — USD 6.625% Senior Notes ...... 2 Luxembourg 2026 6.625% 495 495 USD 6.000% Senior Notes ...... 3 Luxembourg 2025 6.000% 492 491 USD 6.250% Senior Notes ...... 4 Luxembourg 2029 6.250% 742 — USD 5.125% Senior Notes ...... 5 Luxembourg 2028 5.125% 492 493 USD 6.750% Senior Notes ...... 6 Paraguay 2022 6.750% — 297 USD 5.875% Senior Notes ...... 6 Paraguay 2027 5.875% 296 — PYG 9.250% Notes...... 6 Paraguay 2026 9.250% 2 — PYG 8.750% Notes (tranche A)...... 6 Paraguay 2024 8.750% 18 — PYG 9.250% Notes (tranche B)...... 6 Paraguay 2026 9.250% 8 — PYG 10.000% Notes (tranche C)...... 6 Paraguay 2029 10.000% 10 — PYG 10.000% Notes ...... 6 Paraguay 2029 10.000% 4 — BOB 4.750% Notes ...... 7 Bolivia 2020 4.750% 30 59 BOB 4.050% Notes ...... 7 Bolivia 2020 4.050% 4 7 BOB 4.850% Notes ...... 7 Bolivia 2023 4.850% 57 71 BOB 3.950% Notes ...... 7 Bolivia 2024 3.950% 36 43 BOB 4.300% Notes ...... 7 Bolivia 2029 4.300% 21 23 BOB 4.300% Notes ...... 7 Bolivia 2022 4.300% 26 30 BOB 4.700% Notes ...... 7 Bolivia 2024 4.700% 32 35 BOB 5.300% Notes ...... 7 Bolivia 2026 5.300% 13 13 BOB 5.000% Notes ...... 7 Bolivia 2026 5.000% 61 0 BOB 4.600% Notes ...... 7 Bolivia 2024 4.600% 40 0 UNE Bond 1 (tranches A and B)...... 8 Colombia 2020 CPI + 5.10% 46 46 UNE Bond 2 (tranches A and B)...... 8 Colombia 2023 CPI + 4.76% 46 46 UNE Bond 3 (tranche A) ...... 8 Colombia 2024 9.350% 49 49 UNE Bond 3 (tranche B)...... 8 Colombia 2026 CPI+4.15% 78 78 UNE Bond 3 (tranche C) ...... 8 Colombia 2036 CPI+4.89% 38 39 USD 4.500% Senior Notes ...... 9 Panama 2030 4.500% 584 — Cable Onda Bonds 5.750% ...... 9 Panama 2025 5.750% 184 184 Total bond financing...... 4,113 2,501

(i) STIBOR – Swedish Interbank Offered Rate. (1) SEK Notes On May 15, 2019, MIC S.A. completed its offering of a SEK 2 billion floating rate senior unsecured sustainability bond due 2024. The bond carries a floating coupon of 3-month Stibor+235bps which we swapped with various banks to hedge its interest rate exposure, pursuant to which it will effectively pay fixed-rate coupons in US dollars between 4.990% and 4.880% (see D.1.2.). The bond has been listed and commenced trading on the Nasdaq Stockholm sustainable bond list on June 12, 2019. Millicom is using the net proceeds of the bond in accordance with the Sustainability Bond Framework which includes both environmental and social investments such as in energy efficiencies, and the expansion of its fixed and mobile networks. Cost of issuance of $2.4 million is amortized over the five year life of the bond (the effective interest rate is 0.200%) (2) USD 6.625% Senior Notes On October 16, 2018, the MIC S.A. issued $500 million aggregate principal amount of 6.625% Senior Notes due 2026. The Notes bear interest at 6.625% p.a., payable semiannually in arrears on each interest payment date. Proceeds were used to finance Cable Onda’s

173 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

acquisition (Note A.1.2.). Costs of issuance of $6 million is amortized over the eight-year life of the notes (the effective interest rate is 6.750%). (3) USD 6.000% Senior Notes On March 17, 2015, MIC S.A. issued a $500 million 6.000% fixed interest rate notes repayable in ten years, to repay the El Salvador 8.000% senior notes and for general corporate purposes. The notes have an effective interest rate of 6.132%. A total amount of $8.6 million of withheld and upfront costs are being amortized over the ten-year life of the bond. On April 8, 2019, the Group obtained consents from the holders of its $500 million 6.000% notes to amend certain provisions of the indenture governing the notes. MIC S.A. paid a cash payment of $1 million (equal to $2.50 per $1,000 principal amount of Notes to holders of the Notes). (4) USD 6.250% Senior Notes On March 25, 2019, MIC S.A. issued $750 million of 6.250% notes due 2029. The notes bear interest at 6.250% p.a., payable semi-annually in arrears on March 25 and September 25 of each year, starting on September 25, 2019. The net proceeds were used to finance, in part, the completed Telefonica CAM Acquisitions (see note A.1.2.). Costs of issuance of $8.2 million are amortized over the ten-year life of the notes (the effective interest rate is 6.360%). (5) USD 5.125% Senior Notes On September 20, 2017, MIC S.A. issued a $500 million, ten-year bond due January 2028, with an interest rate of 5.125%. Costs of issuance of $7 million are amortized over the ten year life of the notes (effective interest rate is 5.240%). (6) PYG Notes In April 2019, Telefónica Celular del Paragua S.A.E. issued $300 million 5.875% senior notes due 2027. The notes bear interest at 5.875% p.a., payable semi-annually in arrears on April 15 and October 15 of each year, starting on October 15, 2019. The net proceeds were used to finance the purchase of the Telecel 6.750% 2022 notes. Costs of issuance of $4 million are amortized over the eight-year life of the notes (the effective interest rate is 6.000%). In June, 2019, Telefónica Celular del Paraguay S.A.E. issued notes in three series under its PYG 300 billion program as follows: Series A for PYG 115 billion (approximately $18 million), with a fixed annual interest rate of 8.750%, maturing in June 2024, series B for PYG 50 billion (approximately $8 million) with a fixed annual interest rate of 9.250%, maturing in May 2026 and series C for PYG 65 billion (approximately $10 million) with a fixed annual interest rate of 10.000%, maturing in May 2029. On December 27, 2019, under the same program, they issued PYG. 35 billion (Approximately $5.4 million) in two tranches: (i) PYG 10 billion (approximately $1.5 million) which bears a fixed annual interest rate of 9.250% and matures on December 30, 2026; and (ii) PYG 25 billion (approximately $3.9 million) which bears a fixed annual interest rate of 10.000% and matures on December 24, 2029. (7) BOB Notes In May 2012, Telefónica Celular de Bolivia S.A. issued BOB 1.36 billion of notes repayable in installments until April 2, 2020. Distribution and other transaction fees of BOB5 million reduced the total proceeds from issuance to BOB 1.32 billion ($191 million). The bond has a 4.750% per annum coupon with interest payable semi-annually in arrears in May and November each year. The effective interest rate is 4.790%. These bonds are listed on the Bolivia Stock Exchange. In November 2015, they issued BOB696 million (approximately $100 million) of notes in two series, series A for BOB104.4 million (approximately $15 million), with a fixed annual interest rate of 4.050%, maturing in August 2020 and series B for BOB591.6 million (approximately $85 million) with a fixed annual interest rate of 4.850%, maturing in August 2023. The bond has coupon with interest payable semi-annually in arrears in March and September during the first two years, thereafter each February and August. The effective interest rate is 4.840%. These bonds are listed on the Bolivia Stock Exchange. On August 11, 2016, Telefónica Celular de Bolivia S.A.. issued a new bond for a total amount of BOB522 million consisting of two tranches (approximately $50 million and $25 million, respectively). Tranche A and B bear fixed interest at 3.950% and 4.300%, and will mature in June 2024 and June 2029, respectively. These bonds are listed on the Bolivia Stock Exchange. On October 12, 2017, they placed approximately $80 million of local currency bonds in three tranches, which will mature in 2022, 2024 and 2026 with a 4.300% , 4.700% and 5.300% respectively. These bonds are listed on the Bolivia Stock Exchange. On July 3, 2019 they issued two bonds one for BOB 420 million (approximately $61 million) with a 5.000% coupon maturing on August 2026 and another one for BOB 280 million (approximately $40 million) with a 4.600% coupon maturing on August 2024. Interest payments is semiannual and both bonds are listed on the Bolivia Stock Exchange. (8) UNE Bonds In March 2010, UNE issued a COP300 billion (approximately $126 million) bond consisting of two tranches with five and ten-year maturities. Interest rates are either fixed or variable depending on the tranche. Tranche A bears variable interest, based on CPI, in Colombian peso and paid in Colombian peso. Tranche B bears variable interest, based on fixed term deposits, in Colombian peso and

174 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

paid in Colombian peso. UNE applied the proceeds to finance its investment plan. Tranche A matured in March 2015 and tranche B will mature in March 2020. In May 2011, UNE issued a COP300 billion (approximately $126 million) bond consisting of two equal tranches with five and twelve- year maturities. Interest rates are variable and depend on the tranche. Tranche A had variable interest, based on CPI, in Colombian peso and paid in Colombian peso. Tranche B bears variable interest, based on CPI, in Colombian peso and paid in Colombian peso. UNE applied the proceeds to finance its investment plan. Tranche A matured in October 2016 and tranche B will mature in October 2023. In May 2016, UNE issued a COP540 billion bond (approximately $176 million) consisting of three tranches (approximately $52 million, $83 million and $41 million respectively). Interest rates are either fixed or variable depending on the tranche. Tranche A bears fixed interest at 9.350%, while tranche B and C bear variable interest, based on CPI, (respective margins of CPI + 4.150% and CPI + 4.890%), in Colombian peso. UNE applied the proceeds to finance its investment plan and repay one bond (COP150 billion tranche). Tranches A, B and C will mature in May 2024, May 2026 and May 2036, respectively. (9) Cable Onda Bonds On August 4, 2015, Cable Onda issued local bonds in Panama for a total amount of $185 million. These bonds are listed on the Panama Stock Exchange and bear a fixed annual interest of 5.750% and are due on August 4, 2025. The bonds were assumed by Millicom as part of the acquisition of Cable Onda. See note A.1.2. for further details on the acquisition. On November 1, 2019, Cable Onda issued $600 million aggregate principal amount of 4.500% senior notes due 2030 payable in U.S. dollars, registered with the Superintendencia del Mercado de Valores de Panamá and listed on the Luxembourg Stock Exchange and on the Panamá Stock Exchange. The Notes bear interest from November 1, 2019 at a rate of 4.500% per annum, payable on January 30, 2020 for the first payment and thereafter semiannually in arrears on each interest payment date. The proceeds were used to fund the Panama Acquisition and to refinance certain local financing. Costs of issuance of $16 million, which include an original issue discount (OID) is amortized over the ten-year life of the notes (the effective interest rate is 4.690%).

C.3.2. Bank and Development Financial Institution financing

Note Country Maturity range Interest rate 2019 2018 (US$ millions) Fixed rate loans PYG Long-term loans ...... 1 Paraguay 2020-2026 Fixed 166 180 USD - Long-term loans ...... 2 Panama 2024 Fixed 150 24 BOB Long-term loans...... 3 Bolivia 2023-2025 Fixed 31 20 Variable rate loans USD Long-term loans...... 4 Costa Rica 2023 Variable 148 148 USD Long-term loans...... Chad 2019 Variable — 1 USD Long-term loans...... 5 Tanzania 2020-2025 Variable 171 90 TZS Long-term loans...... 5 Tanzania 2025 Variable 14 — USD Short-term loans...... 8 Luxembourg 2019 Variable — 250 USD Long-term loans...... 8 Luxembourg 2024 Libor + 3.00% 298 — COP Long-term loans...... 6 Colombia 2025-2030 Variable 274 277 USD Long-term loans...... 6 Colombia 2024 Variable 295 298 USD Credit Facility / Senior Unsecured Term Loan Facility...... 7 El Salvador 2021-2023 Variable 268 274 Other Long-term loans...... Various Various — 51 Total Bank and Development Financial Institution financing ...... 1,817 1,613

1. Paraguay In October 2015, Telefónica Celular del Paraguay S.A.E. entered into a five -year loan facility with Banco Itau for PGY 257,700 million (approximately $40 million) which bears a fixed annual interest rate. The final maturity of the loan is on September 10, 2020. On July 4, 2017, Telefónica Celular del Paraguay S.A.E executed a five-year loan agreement with the IPS (Instituto de Prevision Social) and the Inter-American Development Bank, who acts as a guarantor, for a total amount of PYG $367,000 million (approximately $66

175 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

million). The loan, denominated in PYG with the final maturity in 2022. The guarantee under this facility is counter-guaranteed by MICSA. In July 2018, Telefónica Celular del Paraguay S.A.E. executed a seven-year loan with Regional Bank for PYG 115,000 million (approximately $18 million with a final maturity in 2025. On January 2, 2019, Telefónica Celular del Paraguay S.A.E. obtained a seven-year loan from BBVA Bank for PYG 177,000 million which is due on November, 26, 2025. On September 25, 2019, Telefónica Celular del Paraguay S.A.E. executed an amended and restated agreement with Banco Continental S.A.E.C.A., to consolidate three existing loans, for a PYG 370,000 million (approximately $57 million). The new loan has a maturity of 7 years. 2. Panama On August 27, 2019, Cable Onda S.A entered into two credit agreements, one with Banco Nacional de Panama S.A , for $75 million which bears a fixed interest and has a 5 year duration and another one with the Bank of Nova Scotia (Sucursal Panama) for $75 million with a fixed interest and a five year duration to finance and refinance working capital and capital expenditures. 3. Bolivia In June 2018, Telefónica Celular de Bolivia S.A.. entered into a two tranche loan agreement with Banco BISA S.A for BOB 69.6 million (approximately $10 million) each, with a fixed interest rate. The loans have a term of 7 years. In November 19, they executed a new loan with Banco de Crédito de Bolivia S.A for Bs. 78,000,000 (approximately$11 million), with semiannual payments and a fixed interest rate. The loan has a term of 4 years. 4. Costa Rica In April 2018, Millicom Cable Costa Rica S.A. entered into a $150 million variable rate syndicated loan with Citibank as agent. In June 2018, Millicom Cable Costa Rica S.A. entered into a cross currency swap to hedge part of the principal of the loan against interest rate and currency risks. Interest rate and currency swap agreements had been made on $35 million of the principal amount and interest rate swaps for an additional $35 million. 5. Tanzania On June 4, 2019, MIC Tanzania Public Limited Company entered into a syndicated loan facility agreement with the Standard Bank of South Africa acting as an agent and a consortium of banks acting as the original lenders, for $174.75 million (tranche A) and TZS103,000 million (tranche B - approximately $45 million) which bears variable interests: for Tranche A Libor plus a margin and for Trance B T-Bill rate plus a margin. The facility agreement has an all asset debenture securing the whole amount, as well as a pledge over the shares of the immediate holding company of the borrower. The Facility was amended and restated on December 12, 2019 and has a maturity of 66 months. It is a stand-alone facility with an all asset debenture and a pledge on the shares of the immediate holding company of the borrower. .Margin and balance between USD and TSZ tranches may vary depending on the syndication demands. 6. Colombia In December 20, 2019, our operation in Colombia executed an amendment to the $300 million loan between Colombia Móvil S.A. E.S.P. as borrower and UNE EPM Telecomunicaciones S.A., as guarantor with a consortium of banks to extend the maturity for 5 years (now due on December 20, 2024) and lower the applicable margin. 7. EL Salvador On April 15, 2016, Telemovil El Salvador, S.A. de C.V. executed a senior unsecured term loan facility up to $50 million maturing in April 2021 and bearing variable interest per annum, which was restated and amended as of May 30, 2017, for a second tranche of $50 million. This facility is guaranteed by MICSA.. Later on, in January 2018, Telemovil El Salvador entered into a second amended and restated agreement with Scotiabank for a third tranche of $50 million with variable rate and with a 5-year bullet repayment, also guaranteed by MICSA. In addition, they executed an interest rate swap with Scotiabank to fix interest rates for up to $100 million of the outstanding debt. On June 3, 2016, Telemovil El Salvador, S.A. de C.V. executed a $30 million credit facility with Citibank N.A., for general corporate purposes maturing in June 2021 and bearing variable interest rate per annum. The facility is guaranteed by MICSA.. In March 2018, Telemovil El Salvador executed a $100 million credit facility with DNB at a variable rate facility with DNB and Nordea with a 5-year bullet repayment.The facility is guaranteed by MICSA..

176 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

8. Luxembourg On April 24, 2019, MICSA. entered into a $300 million term facility agreement arranged by DNB Bank ASA, Sweden Branch and Nordea Bank Abp, Filial i Sverige. This facility has a variable interest rate and is fully drawn as at December 31, 2019 and is due on April 2024.

Right of set-off and derecognition Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. A financial asset (or a part of a financial asset or part of a group of similar financial assets) is derecognized when: • Rights to receive cash flows from the asset have expired; or • Rights to receive cash flows from the asset or obligations to pay the received cash flows in full without material delay have been transferred to a third party under a “pass-through” arrangement; and the Group has either transferred substantially all the risks and rewards of the asset or the control of the asset. When rights to receive cash flows from an asset have been transferred or a pass-through arrangement concluded, an evaluation is made if and to what extent the risks and rewards of ownership have been retained. When the Group has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. A financial liability is derecognized when the obligation under the liability is discharged or canceled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of income.

C.3.3. Interest and other financial expenses

The Group’s interest and other financial expenses comprised the following:

Year ended December 31, 2019 2018 2017 (US$ millions) Interest expense on bonds and bank financing ...... (348) (234) (246) Interest expense on (finance) leases...... (157) (91) (65) Early redemption charges...... (10) (4) (43) Others...... (47) (37) (35) Total interest and other financial expenses ...... (564) (367) (389)

C.3.4. Finance leases - until December 31, 2018

As at December 31, 2018, Millicom’s finance leases mainly consisted of long-term lease of tower space from tower companies or competitors on which Millicom locates its network equipment. Finance lease liabilities were included in Debt and Financing until December 31, 2018, but were reclassified to lease liabilities on January 1, 2019 in the process of adopting the new lease standard: IFRS 16. See above in the "New and amended IFRS accounting standards" and notes C.4. and E.4. for further information. Finance lease liabilities Under IAS 17, leases which transferred substantially all risks and benefits incidental to ownership of the leased item to the lessee were capitalized at the inception of the lease. The amount capitalized was the lower of the fair value of the asset or the present value of the minimum lease payments. Lease payments were allocated between finance charges (interest) and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges were recorded as interest expenses in the statement of income.

177 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The sale and leaseback of towers and related site operating leases and service contracts were accounted for in accordance with the underlying characteristics of the assets, and the terms and conditions of the lease agreements. When sale and leaseback agreements were concluded, the portions of assets that will not be leased back by Millicom were classified as assets held for sale as completion of their sale was highly probable. Asset retirement obligations related to the towers were classified as liabilities directly associated with assets held for sale. On transfer to the tower companies, the portion of the towers leased back were accounted for as operating leases or finance leases according to the criteria set out above. The portion of towers being leased back represented the dedicated part of each tower on which Millicom’s equipment was located and was derived from the average technical capacity of the towers. Rights to use the land on which the towers were located were accounted for as operating leases, and costs of services for the towers were recorded as operating expenses. The gain on disposal was recognized upfront for the portion of towers that is not leased back, and was deferred and recognized over the term of the lease for the portion leased back.

Finance lease liabilities at December 31, 2018

Country Maturity 2018 (US$ millions) Lease of tower space...... Tanzania 2029/2030 112 Lease of tower space...... Colombia Movil 2032 83 Lease of poles ...... Colombia (UNE) 2032 99 Lease of tower space...... Paraguay 2030 27 Lease of tower space...... El Salvador 2026 26 Other finance lease liabilities...... various various 6 Total finance lease liabilities...... 353

Tower Sale and Leaseback In 2017 and 2018, the Group announced agreements to sell and leaseback wireless communications towers in Paraguay, Colombia and El Salvador. Total gain on sale recognized in 2019 was $5 million (2018: $61 million, 2017: $63 million) and cash received from these sales were $22 million, $141 million and $161 million, respectively.

C.3.5. Guarantees and pledged assets

Guarantees Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognized, less cumulative amortization. Liabilities to which guarantees are related are recorded in the consolidated statement of financial position under Debt and financing, and liabilities covered by supplier guarantees are recorded under Trade payables or Debt and financing, depending on the underlying terms and conditions.

Maturity of guarantees

At December 31, 2019 At December 31, 2018 Terms Outstanding exposure Maximum exposure(ii) Outstanding exposure Maximum exposure(ii) (i) (i) (US$ millions) 0-1 year...... 29 29 133 133 1-3 years...... 134 134 281 281 3-5 years...... 300 300 212 212 Total ...... 464 464 626 626

(i) The outstanding exposure represents the carrying amount of the related liability at December 31. (ii) The maximum exposure represents the total amount of the Guarantee at December 31.

178 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Pledged assets As at December 31, 2019, the Group’s share of total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit, or guarantees issued was $464 million (December 31, 2018: $626 million). Assets pledged by the Group over these debts and financings amounted to $1 million at December 31, 2019 (December 31, 2018: $2 million). The remainder represented primarily guarantees issued by Millicom S.A. to guarantee financings raised by other Group operating entities. In addition to the above, on June 4, 2019, MIC Tanzania Public Limited Company entered into a loan facility agreement which was further amended and restated in December 12, 2019, with the Standard Bank of South Africa acting as an agent and a consortium of banks acting as the original lenders. The facility agreement, maturing in 2025, has an all asset debenture securing the whole amount, as well as a pledge over the shares of the immediate holding company of the borrower.

C.3.6. Covenants

Millicom’s financing facilities are subject to a number of covenants including net leverage ratio, debt service coverage ratios, or debt to earnings ratios, among others. In addition, certain of its financings contain restrictions on sale of businesses or significant assets within the businesses. At December 31, 2019, there were no breaches of financial covenants.

C.4. Lease liability

As a result of the adoption of IFRS 16 'Leases', and as of December 31, 2019 (see above in the "New and amended IFRS accounting standards") lease liabilities are presented in the statement of financial position as follows:

December 31, 2019 (US$ millions) Current 97 Non Current 967 Total Lease liability...... 1,063

As permitted under IFRS 16, Millicom has elected not to recognize a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are rather recognized on a straight-line basis as an expense in the statement of income. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture. In addition, certain variable lease payments are not permitted to be recognized as lease liabilities and are expensed as incurred. The expenses relating to payments not included in the measurement of the lease liability are disclosed in operating expenses (note B.3.) and are as follows:

2019 (US$ millions)

Expense relating to short-term leases (included in cost of sales and operating expenses) (5)

The total cash outflow for leases in 2019 was $236 million. Lease liabilities split by maturity and future cash outflows are disclosed in note D.5.. At December 31, 2019, the Group has not committed to any material leases which had not yet commenced and has no material lease contracts with variable lease payments. The Group's leasing activities and how these are accounted for The Group leases various lands, sites, towers (including those related to towers sold and leased back), offices, warehouses, retail stores, equipment and cars. Rental contracts are typically made for fixed periods but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. Through December 31, 2018, leases of property, plant and equipment were classified as either finance or operating leases. See note C.3.4. for further details on existing finance leases as of December 31, 2018. Payments made under operating leases (net of any incentives received from the lessor) were charged to the statement of income on a straight-line basis over the period of the lease.

179 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

From January 1, 2019, leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the reduction of the liability and finance cost. The finance cost is charged to the statement of income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable • variable lease payment that are based on an index or a rate • amounts expected to be payable by the lessee under residual value guarantees • the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and • payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The lease payments are discounted using the interest rate implicit in the lease. As it is generally impracticable to determine that rate, the Group uses the lessee’s incremental borrowing rate, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The incremental borrowing rate applied can have a significant impact on the net present value of the lease liability recognized under IFRS 16. The Group determines the incremental borrowing rate by country and by considering the risk-free rate, the country risk, the industry risk, the credit risk and the currency risk, as well as the lease and payment terms and dates. The Group is also exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is adjusted against the right-of-use asset by discounting the revised lease payments using either the initial discount rate or a revised discount rate. The initial discount rate is used if future lease payments are reflecting market or index rates or if they are in substance fixed. The discount rate is revised, if a change in floating interest rates occurs. The Group reassess the variable payment only when there is a change in cash flows resulting from a change in the reference index or rate and not at each reporting date. According to IFRS 16, lease term is defined as the non-cancellable period for which a lessee has the right to use an underlying asset, together with both: (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and (b) periods covered by an option to terminate if the lessee is reasonably certain not to exercise that option. The assessment of such options is performed at the commencement of a lease. As part of the assessment, Millicom introduced the 'time horizon concept': the reasonable term under which the company expects to use a leased asset considering economic incentives, management decisions, business plans and the fast-paced industry Millicom operates in. The assessment must be focused on the economic incentives for Millicom to exercise (or not) an option to early terminate/extend a contract. The Group has decided to work on the basis the lessor will generally accept a renewal/not early terminate a contract, as there is an economic incentive to maintain the contractual relationship. Millicom considered the specialized nature of most of its assets under lease, the low likelihood the lessor can find a third party to substitute Millicom as a lessee and past practice to conclude that, the lease term can go beyond the notice period when there is more than an insignificant penalty for the lessor not to renew the lease. This analysis requires judgment and has a significant impact on the lease liability recognized under IFRS 16. Under IFRS 16, the accounting for sale and leaseback transactions has changed as the underlying sale transaction needs to be first analyzed using the guidance of IFRS 15. The seller/lessee recognizes a right-of-use asset in the amount of the proportional original carrying amount that relates to the right of use retained. Accordingly, only the proportional amount of gain or loss from the sale must be recognized. The impact from sale and leaseback transactions was not material for Millicom Group as of the date of initial application. Finally, the Group has taken the additional following decisions when adopting the standard: • Non-lease components are capitalized (IFRS16.15) • Intangible assets are out of IFRS 16 scope (IFRS16.4)

C.5. Cash and deposits

C.5.1. Cash and cash equivalents

180 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

2019 2018 (US$ millions) Cash and cash equivalents in USD...... 834 229 Cash and cash equivalents in other currencies...... 330 299 Total cash and cash equivalents...... 1,164 528

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Cash deposits with bank with maturities of more than three months that generally earn interest at market rates are classified as time deposits.

C.5.2. Restricted cash

2019 2018 (US$ millions) Mobile Financial Services...... 150 155 Others...... 5 3 Restricted cash...... 155 158

Cash held with banks related to MFS which is restricted in use due to local regulations is denoted as restricted cash.

181 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.5.3. Pledged deposits

Pledged deposits represent contracted cash deposits with banks that are held as security for debts at corporate or operational entity level. Millicom is unable to access these funds until either the relevant debt is repaid or alternative security is arranged with the lender. At December 31, 2019, there were no non-current pledged deposits (2018: nil). At December 31, 2019, current pledged deposits amounted to $1 million (2018: $2 million).

C.6. Net financial obligations

Net financial obligations (i)

2019 2018 (US$ millions) Total debt and financing (i) ...... 5,972 4,580 Lease liabilities (i) ...... 1,063 — Gross financial obligations ...... 7,036 4,580 Less: Cash and cash equivalents ...... (1,164) (528) Pledged deposits...... (1) (2) Time deposits related to bank borrowings...... (1) — Net financial obligations at the end of the year ...... 5,870 4,051 Add (less) derivatives related to debt (note D.1.2.)...... (17) — Net financial obligations including derivatives related to debt...... 5,853 4,051

(i) As at December 31, 2018, Debt and financing included finance lease liabilities of $353 million. As at December 31, 2019, and as a result of the application of IFRS 16, these are now shown in a separate line under Lease liabilities.

Assets Liabilities from financing activities Cash and cash Bond and bank Finance lease Lease equivalents Other debt and financing liabilities(i) liabilities(i) Total Net financial obligations as at January 1, 2018... 619 2 3,420 365 — 3,164 Cash flows...... (72)— 621 (17) — 676 Scope Changes...... 7 — 267 — — 260 Additions/ acquisitions...... —— — 44 — 44 Interest accretion...... —— 11 — — 11 Foreign exchange movements...... (33)— (84) (21) — (72) Transfers to/from assets held for sale...... 6 — 9 (8) — (4) Transfers...... —— 3 (11) — (9) Other non-cash movements...... —— (19) — — (19) Net financial obligations as at December 31, 528 2 4,227 353 — 4,051 2018...... Cash flows...... 638 — 1,743 — (107) 998 Scope changes...... 16 — 74 — 178 236 Recognition / Remeasurement...... —— — — 109 109 Change in accounting policy...... —— — — 545 545 Interest accretion...... —— 8 — — 8 Foreign exchange movements...... (8)— (16) — (6) (14) Transfers to/from assets held for sale...... (9)— (53) — (8) (52) Transfers...... —— 3 (353) 353 3 Other non-cash movements...... —— (14) — — (14) Net financial obligations as at December 31, 1,164 2 5,972 — 1,063 5,870 2019...... (i) As from January 1, 2019 and as a result of the application of IFRS 16, finance leases are now shown under lease liabilities.

182 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.7. Financial instruments

i) Equity and debt instruments

Classification From January 1, 2018, and the application of IFRS 9, the Group classifies its financial assets in the following measurement categories: • those to be measured subsequently at fair value either through Other Comprehensive Income (OCI), or through profit or loss, and • those to be measured at amortized cost. The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). The Group reclassifies debt investments when and only when its business model for managing those assets changes. Measurement At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Debt instruments Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments: • Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains / (losses), together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the consolidated statement of income. • FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in ‘Other non-operating (expenses) income, net’. Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses and impairment expenses are presented as ‘Other non-operating (expenses) income, net’ in the consolidated statement of income. • FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within ‘Other non-operating (expenses) income, net’ in the period in which it arises. Equity instruments The Group subsequently measures all equity investments at fair value. The Group does not hold equity instruments for trading. Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established. Otherwise, changes in the fair value of financial assets at FVPL are recognized in ‘Other non-operating (expenses) income, net’ in the consolidated statement of income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

183 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Impairment From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the trade receivables. The provision is recognized in the consolidated statement of income within Cost of sales.

ii) Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at fair value at each subsequent closing date. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged. The Group designates certain derivatives as either: a) Hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedge); or b) Hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge). For transactions designated and qualifying for hedge accounting, at the inception of the transaction, the Group documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. This is done in reference to the Group Financial Risk Management Policy as last updated and approved by the Audit Committee in late 2018. The Group also documents its assessment, both at hedge inception and on an ongoing basis (quarterly), of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The full fair value of a hedging instrument is classified as a non-current asset or liability when the period to maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability when the remaining period to maturity of the hedged item is less than 12 months. The change in fair value of hedging instruments that are designed and qualify as fair value hedges is recognized in the statement of income as finance costs or income. The change in fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognized in the statement of income as finance costs or income. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. Gains or loss relating to any ineffective portion is recognized immediately in the statement of income within Other non-operating (expenses) income, net. Amounts accumulated in equity are reclassified to the statement of income in the periods when the hedged item affects profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time is recycled to the statement of income within Other non-operating (expenses) income, net. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of income within Other non-operating (expenses) income, net.

C.7.1. Fair value measurement hierarchy

Millicom uses the following fair value measurement hierarchy: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 3 – Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade ratings. Interest rate swaps and foreign exchange forward contracts are valued using valuation techniques, which employ the use of markets observable data. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, interest rate curves and forward curves.

184 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.7.2. Fair value of financial instruments

The fair value of Millicom’s financial instruments are shown at amounts at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair value of all financial assets and all financial liabilities, except debt and financing approximate their carrying value largely due to the short-term maturities of these instruments. The fair values of all debt and financing have been estimated by the Group, based on discounted future cash flows at market interest rates.

Fair values of financial instruments at December 31,

Carrying value Fair value(i) Note 2019 2018 (ii) (iii) 2019 2018 (ii) (iii) (US$ millions) Financial assets Derivative financial instruments...... — — — — Other non-current assets...... 66 87 66 87 Trade receivables, net ...... 371 343 371 343 Amounts due from non-controlling interests, associates and 68 73 68 73 joint venture partners...... G.5. Prepayments and accrued income ...... 156 129 156 129 Supplier advances for capital expenditures ...... 22 25 22 25 Equity Investment ...... 371 — 371 — Other current assets ...... 181 124 181 124 Restricted cash ...... C.5.2. 155 158 155 158 Cash and cash equivalents...... C.5.1. 1,164 528 1,164 528 Total financial assets...... 2,554 1,467 2,554 1,467 Current...... 2,449 1,341 2,449 1,341 Non-current...... 104 126 104 126 Financial liabilities Debt and financing(i) ...... C.3. 5,972 4,580 6,229 4,418 Lease liabilities...... 1,063 — 1,063 — Trade payables...... 289 282 289 282 Payables and accruals for capital expenditure...... 348 335 348 335 Derivative financial instruments...... 17 — 17 (1) Put option liability...... C.7.4. 264 239 264 239

Amounts due to non-controlling interests, associates and joint G.5. 498 483 498 483 venture partners ...... Accrued interest and other expenses ...... 432 381 432 381 Other liabilities ...... 399 399 399 399 Total financial liabilities...... 9,282 6,698 9,538 6,536 Current...... 2,045 2,330 2,045 2,329 Non-current...... 7,237 4,370 7,493 4,208

(i) Fair values are measured with reference to Level 1 (for listed bonds) or 2. (ii) As at December 31, 2018, Debt and financing included finance lease liabilities of $353 million. As at December 31, 2019, and as a result of the application of IFRS 16, these are now shown in a separate line under Lease liabilities. (iii) The consolidated statement of financial position at December 31, 2018 has been restated after finalization of the Cable Onda purchase accounting (note A.1.2.).

185 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.7.3. Equity investments

As at December 31, 2019, Millicom has the following investments in equity instruments:

2019 2018 (US$ millions) Investment in Jumia...... 32 — Investment in HT ...... 338 — Equity investment - total...... 371 —

Jumia Technologies AG (“Jumia”) Jumia indirectly owns a number of companies that provide online services and online marketplaces in certain countries in Africa. In January 2019, Millicom was diluted in the capital of the company following the entry of a new investor. This triggered the recognition of a net dilution gain of $7 million in January 2019. In addition, during Q1 2019, in preparation of Jumia's IPO, Millicom relinquished its seat on the board of directors, which resulted in the loss of the Group's significant influence over Jumia. As a result, Millicom derecognized its investment in associate in Jumia and recognized it as a financial asset (equity instrument) at fair value under IFRS 9. On April 11, 2019, Jumia completed its IPO at the offer price per share of $14.5 and shares started trading on the NYSE on April 12, 2019. As a result, as of March 31, 2019, a net gain of $30 million had been recognized and reported under ‘Income (loss) from associates, net’. Post IPO, Millicom holds 6.31% of the outstanding shares of Jumia. At December 31, 2019, the closing price of a Jumia share was $6.73, which values Millicom's investment at $32 million (level 1). The changes in fair value of $(38) million for the year ended December 31, 2019 is shown under 'Other non-operating (expenses) income, net' (see note B.5). Helios Towers plc (“HT”) In October 2019, Helios Towers plc (a company inserted as the holding company of HTA just prior to IPO) completed its IPO on the London Stock Exchange at a price of GBP 1.15 per share valuing the company at enterprise value of approximately $2.0 billion and a market capitalization of $1.45 billion.

As part of the listing process, on October 17, 2019, Millicom first was diluted as HT management exercised their IPO option rights (~4%). This event triggered the recognition of a non-cash dilution loss of $3 million recorded under ‘Income/(loss) from other joint ventures and associates’.

On the same day, Millicom resigned from its board of directors seats, which resulted in the loss of the Group's significant influence over HT. As a result, as from that date, Millicom derecognized its investment in associate in HT and recognized it as a financial asset at fair value under IFRS 9. The derecognition of the investment in associate and recognition of the equity investment in HT at a fair value of $292 million triggered the recognition of a net non-cash P&L gain of $208 million recorded under ‘Other non-operating income (expense), net’. Fair value was determined using the IPO reference share price of GBP1.15.

As a result of the IPO and the subsequent exercise of the overallotment option, Millicom disposed of a portion of its ownership (in total ~20%) yielding $57 million in gross proceeds and $25 million in net proceeds after fees and Millicom's share in tax escrow of $30 million which has been deducted in full from the gain given the high level of uncertainties used in assessing the potential tax liability. These disposals did trigger a loss of $32 million, as a result of the tax escrow and transaction fees, and are recorded under ‘Other operating income (expenses), net’.

Post-IPO and overallotment option exercise, Millicom holds a 16.2% stake which, as at December 31, 2019, is valued at $338 million (level 1) using a closing share price of GBP 1.58. The gain on derecognition and changes in fair value of $312 million for the year ended December 31, 2019 is shown under 'Other non-operating (expenses) income, net' (see note B.5).

186 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.7.4. Call and put options

Cable Onda call and put options As part of the acquisition of Cable Onda, shareholders agreed on certain put and call options as follows: The put option to acquire the remaining 20% non-controlling interest in Cable Onda became exercisable 42 months after the closing date (December 13, 2018) or earlier upon the occurrence of certain events. In that respect, Millicom determined that, as the put option could be exercised under certain change of control events which could be outside the control of Millicom, the option meets the criteria under IAS 32 for recognition as a liability and corresponding equity decrease. The put option liability was payable in Millicom's shares or in cash at the discretion of the partner. Therefore, Millicom recorded a liability for the put option at acquisition completion date of $239 million representing the present value of the redemption amount. As of December 31, 2018, the redemption price has been valued as being 20% of the equity value implied by the transaction. Any future change in the redemption price will be recorded in the Group's statement of income. Millicom also received an unconditional call option which became exercisable either 42 months after December 13, 2018 closing date or if Millicom's partners’ shareholdings fall below 10%. The call option exercise price was at fair market value. Finally, Millicom received an unconditional call option exercisable until December 13, 2019, at a price equal to the purchase price in the transaction, plus interest at 10% per annum. The fair values of both call options were assessed as not material at December 31, 2018. As a consequence of the Telefonica Panama acquisition, on August 29, 2019 the shareholders agreed to amend the call and put options in respect of the remaining 20% non-controlling interest that were set as part of the acquisition of Cable Onda. First, the parties agreed to new unconditional call and put options to acquire the remaining 20% non-controlling interest in Cable Onda becoming exercisable at any time from July 2022, both, at fair market value. Second, they also agreed on 'Transaction Price' call and put options conditional to the occurrence of certain events, such as change of control of Millicom or at any time if Millicom's non-controlling partners’ shareholdings fall below 10%, and becoming exercisable on the date of the Telefonica Panama closing (August 29, 2019) and extending until July 2022. The put and call options are exercisable at the purchase price in the Cable Onda transaction (enterprise value of $1.46 billion), plus interest at 5% per annum (put) and at 10% per annum (call), respectively. Millicom determined that, both the new unconditional put option and 'Transaction Price' put option could be exercised under events which are outside the control of Millicom. The options are payable in Millicom's shares or in cash at the discretion of the partner and therefore also meet the criteria under IAS 32 for recognition as a liability and a corresponding equity decrease - which is the same conclusion as for previous put option for which a liability had already been recognized at acquisition date in 2018. The put option liability is now valued at the higher of fair market value and Transaction Price plus interest at 5% per annum and is payable in Millicom's shares or in cash at the discretion of the partner. As of December 31, 2019, the value of the 'Transaction Price' put option is lower than fair market value, and therefore the Group recognized the put option liability at the higher of both valuations at $264 million (see note B.5). The Group is required to re-value the liability each reporting date and any further change in the value of the put option liability will be recorded in the Group's statement of income. Both call options are currently not exercisable and therefore no value at December 31, 2019.

D. Financial risk management

Exposure to interest rate, foreign currency, non-repatriation, liquidity, capital management and credit risks arise in the normal course of Millicom’s business. Each year Group Treasury revisits and presents to the Audit committee updated Treasury and Financial Risks Management policies. The Group analyzes each of these financial risks individually as well as on an interconnected basis and defines and implements strategies to manage the economic impact on the Group’s performance in line with its Financial Risk Management policy. These policies were last reviewed in late 2018. As part of the annual review of the above mentioned risks, the Group agrees to a strategy over the use of derivatives and natural hedging instruments ranging from raising debt in local currency (where the Company targets to reach 40% of debt in local currency over the medium term) to maintain a combination of up to 75/25% mix between fixed and floating rate debt or agreeing to cover up to six months forward of operating costs and capex denominated in non-functional currencies through a rolling and layering strategy. Millicom’s risk management strategies may include the use of derivatives to the extent a market would exist in the jurisdictions where the Group operates. Millicom’s policy prohibits the use of such derivatives in the context of speculative trading. Accounting policies for derivatives is further detailed in note C.7. On December 31, 2019 and 2018 fair value of derivatives held by the Group can be summarized as follows:

187 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

2019 2018 (US$ millions) Derivatives Cash flow hedge derivatives...... (17) — Net derivative asset (liability)...... (17) —

D.1. Interest rate risk

Debt and financing issued at floating interest rates expose the Group to cash flow interest rate risk. Debt and financing issued at fixed rates expose the Group to fair value interest rate risk. The Group’s exposure to risk of changes in market interest rates relate to both of the above. To manage this risk, the Group’s policy is to maintain a combination of fixed and floating rate debt with target that more than 75% of the debt be at fixed rate. The Group actively monitors borrowings against this target. The target mix between fixed and floating rate debt is reviewed periodically. The purpose of Millicom’s policy is to achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business strategy. At December 31, 2019, approximately 76% of the Group’s borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates with interest rate swaps (2018: 68%).

D.1.1. Fixed and floating rate debt

Financing at December 31, 2019

Amounts due within: 1 year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total (US$ millions) Fixed rate financing...... 118 117 118 332 431 3,428 4,543 Weighted average nominal 6.32% 5.46% 5.01% 7.24% 5.44% 5.81% 5.86% interest rate...... Floating rate financing...... 68 38 27 185 654 457 1,429 Weighted average nominal 2.97% 1.77% 1.41% 3.25% 4.26% 0.96% 1.52% interest rate...... Total...... 186 155 145 517 1,085 3,884 5,972 Weighted average nominal 5.10% 4.55% 4.34% 5.81% 4.73% 5.24% 4.82% interest rate......

Financing at December 31, 2018

Amounts due within: 1 year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total (US$ millions) Fixed rate financing...... 140 162 137 436 204 2,036 3,116 Weighted average nominal interest rate...... 6.35% 6.59% 6.64% 6.61% 4.10% 6.47% 6.34% Floating rate financing...... 318 175 266 133 263 309 1,465 Weighted average nominal interest rate...... 10.28% 5.89% 2.73% 0.49% 4.41% 1.13% 1.98% Total...... 458 337 403 570 468 2,345 4,580 Weighted average nominal interest rate...... 9.08% 6.23% 4.06% 5.18% 4.28% 5.76% 4.95%

A 100 basis point fall or rise in market interest rates for all currencies in which the Group had borrowings at December 31, 2019 would increase or reduce profit before tax from continuing operations for the year by approximately $14 million (2018: $15 million).

188 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

D.1.2. Interest rate swap contracts

From time to time, Millicom enters into currency and interest rate swap contracts to manage its exposure to fluctuations in interest rates and currency fluctuations in accordance with its Financial Risk Management policy. Details of these arrangements are provided below. Currency and interest rate swap contracts MIC S.A. entered into swap contracts in order to hedge the foreign currency and interest rate risks in relation to the SEK 2 billion (~ $211 million) senior unsecured sustainability bond issued in May 2019 (note C.3.1.). These swaps are accounted for as cash flow hedges as the timing and amounts of the cash flows under the swap agreements match the cash flows under the SEK bond. Their maturity date is May 2024. The hedging relationship is highly effective and related fluctuations are recorded through other comprehensive income. At December 31, 2019, the fair values of the swaps amount to a liability of $0.2 million. Our operations in El Salvador and Costa Rica also entered into several swap agreements in order to hedge foreign currency and interest rate risks on certain long term debts. These swaps are accounted for as cash flow hedges and related fair value changes are recorded through other comprehensive income. At December 31, 2019, the fair values of these swaps amount to liabilities of $17 million. Interest rate and currency swaps are measured with reference to Level 2 of the fair value hierarchy There are no other derivative financial instruments with a significant fair value at December 31, 2019.

189 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

D.2. Foreign currency risks

The Group is exposed to foreign exchange risk arising from various currency exposures in the countries in which it operates. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. Millicom seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities denominated in foreign currencies, or entering into agreements that limit the risk of exposure to currency fluctuations against the US dollar reporting currency. In some cases, Millicom may also borrow in US dollars where it is either commercially more advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or where US dollar denominated borrowing is the only funding source available to a joint venture or subsidiary. In these circumstances, Millicom accepts the remaining currency risk associated with financing its joint ventures and subsidiaries, principally because of the relatively high cost of forward cover, when available, in the currencies in which the Group operates.

D.2.1. Debt denominated in US dollars and other currencies

Debt denomination at December 31

2019 2018 (US$ millions) Debt denominated in US dollars...... 3,535 2,572 Debt denominated in currencies of the following countries Colombia...... 531 718 Chad...... — 62 Tanzania...... 14 112 Bolivia...... 350 306 Paraguay...... 206 207 El Salvador(i) ...... 268 299 Panama(i) ...... 918 261 Luxembourg (COP denominated)...... 43 43 Costa Rica...... 107 — Total debt denominated in other currencies...... 2,437 2,008 Total debt...... 5,972 4,580

(i) El Salvador's official unit of currency is the U.S. dollar, while Panama uses the U.S. dollar as legal tender. Our local debt in both countries is therefore denominated in U.S. dollars but presented as local currency (LCY). At December 31, 2019, if the US dollar had weakened/strengthened by 10% against the other functional currencies of our operations and all other variables held constant, then profit before tax from continuing operations would have increased/decreased by $17 million (2018: $53 million). This increase/decrease in profit before tax would have mainly been as a result of the conversion of the USD-denominated net debts in our operations with functional currencies other than the US dollar.

D.2.2. Foreign currency swaps

See note D.1.2. Interest rate swap contracts.

D.3. Non-repatriation risk

Most of Millicom’s operating subsidiaries and joint ventures generate most of the revenue of the Group and in the currency of the countries in which they operate. Millicom is therefore dependent on the ability of its subsidiaries and joint venture operations to transfer funds to the Company. Although foreign exchange controls exist in some of the countries in which Millicom Group companies operate, none of these controls currently significantly restrict the ability of these operations to pay interest, dividends, technical service fees, royalties or repay loans by exporting cash, instruments of credit or securities in foreign currencies. However, existing foreign exchange controls may be strengthened in countries where the Group operates, or foreign exchange controls may be introduced in countries where the Group operates that do not currently impose such restrictions. If such events were to occur, the Company’s ability to receive funds from the operations could be subsequently restricted, which would impact the Company’s ability to make payments on its interest and loans and, or pay dividends to its shareholders. As a policy, all operations which do not face restrictions to deposit funds

190 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

offshore and in hard currencies should do so for the surplus cash generated on a weekly basis. The Company and its subsidiaries make use of notional and physical cash pooling arrangements in hard currencies to the extent permitted. In addition, in some countries it may be difficult to convert large amounts of local currency into foreign currency because of limited foreign exchange markets. The practical effects of this may be time delays in accumulating significant amounts of foreign currency and exchange risk, which could have an adverse effect on the Group. This is a relatively rare case for the countries in which the Group operates. Lastly, repatriation most often gives raise to taxation, which is evidenced in the amount of taxes paid by the Group relative to the Corporate Income Tax reported in its statement of income.

D.4. Credit and counterparty risk

Financial instruments that subject the Group to credit risk include cash and cash equivalents, pledged deposits, letters of credit, trade receivables, amounts due from joint venture partners and associates, supplier advances and other current assets and derivatives. Counterparties to agreements relating to the Group’s cash and cash equivalents, pledged deposits and letters of credit are significant financial institutions with investment grade ratings. Management does not believe there are significant risks of non- performance by these counterparties and maintain a diversified portfolio of banking partners. Allocation of deposits across banks are managed such that the Group’s counterparty risk with a given bank stays within limits which have been set, based on each bank’s credit rating. A large portion of revenue of the Group is comprised of prepaid products and services. For postpaid customers, the Group follows risk control procedures to assess the credit quality of the customer, taking into account its financial position, past experience and other factors. Accounts receivable also comprise balances due from other telecom operators. Credit risk of other telecom operators is limited due to the regulatory nature of the telecom industry, in which licenses are normally only issued to credit-worthy companies. The Group maintains a provision for expected credit losses of trade receivables based on its historical credit loss experience. As the Group has a large number of internationally dispersed customers, there is generally no significant concentration of credit risk with respect to trade receivables, except for certain B2B customers (mainly governments). See note F.1.

D.5. Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group has significant indebtedness but also has significant cash balances. Millicom evaluates its ability to meet its obligations on an ongoing basis using a recurring liquidity planning tool. This tool considers the operating net cash flows generated from its operations and the future cash needs for borrowing, interest payments, dividend payments and capital and operating expenditures required in maintaining and developing its operating businesses. The Group manages its liquidity risk through use of bank overdrafts, bank loans, bonds, vendor financing, Export Credit Agencies and Development Finance Institutions (DFI) loans. Millicom believes that there is sufficient liquidity available in the markets to meet ongoing liquidity needs. Additionally, Millicom is able to arrange offshore funding. Millicom has a diversified financing portfolio with commercial banks representing about 26% of its gross financing (2018: 34%), bonds 58% (2018: 54%), Development Finance Institutions 1% (2018: 4%) and leases 15% (2018: 8%).

191 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Maturity profile of net financial liabilities at December 31, 2019

Less than 1 year 1 to 5 years >5yrs Total (US$ millions) Total debt and financing...... (186) (1,902) (3,884) (5,972) Lease liability...... (97) (490) (476) (1,063) Cash and equivalents ...... 1,164 — — 1,164 Pledged deposits (related to back borrowings) ...... 1 — — 1 Refundable deposit — — — — Derivative financial instruments ...... (17) — — (17) Net cash (debt) including derivatives related to debt ...... 865 (2,392) (4,361) (5,888) Future interest commitments related to debt and financing...... (308) (1,088) (106) (1,502) Future interest commitments related to leases...... (157) (476) (295) (928) Trade payables (excluding accruals)...... (510) — — (510) Other financial liabilities (including accruals) ...... (1,052) (337) — (1,388) Derivative instruments (17) — — (17) Put option liability...... (264) — — (264) Trade receivables ...... 371 — — 371 Other financial assets...... 602 104 — 707 Net financial liabilities...... (469) (4,189) (4,762) (9,420)

Maturity profile of net financial liabilities at December 31, 2018

Less than 1 year 1 to 5 years >5yrs Total (US$ millions) Total debt and financing(i)...... (458) (1,778) (2,345) (4,580) Cash and equivalents ...... 528 — — 528 Pledged deposits (related to back borrowings) ...... 2 — — 2 Net cash (debt) including derivatives related to debt 72 (1,778) (2,345) (4,051) Future interest commitments related to debt and financing (248) (786) (77) (1,111) Trade payables (excluding accruals) (478) — — (478) Other financial liabilities (including accruals) (1,212) (135) — (1,347) Put option liability (239) — — (239) Trade receivables 343 — — 343 Other financial assets...... 181 126 — 306 Net financial liabilities...... (1,582) (2,573) (2,422) (6,577)

D.6. Capital management

The primary objective of the Group’s capital management is to ensure a strong credit rating and solid capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure with reference to local economic conditions and imposed restrictions such as debt covenants. To maintain or adjust its capital structure, the Group may make dividend payments to shareholders, return capital to shareholders through share repurchases or issue new shares. At December 31, 2019, Millicom is rated at one notch below investment grade by the independent rating agencies Moody’s (Ba1 negative) and Fitch (BB+ stable). The Group primarily monitors capital using net financial obligations to EBITDA.

192 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The Group reviews its gearing ratio (net financial obligations divided by total capital plus net financial obligations) periodically. Net financial obligations includes interest bearing debt and lease liabilities, less cash and cash equivalents (included restricted cash) and pledged and time deposits related to bank borrowings. Capital represents equity attributable to the equity holders of the parent.

Net financial obligations to EBITDA

Note 2019 2018 (US$ millions) Net financial obligations (i) ...... C.6. 5,870 4,051 EBITDA ...... B.3. 1,530 1,213 Net financial obligations to EBITDA (ii) ...... 3.84 3.34

(i) As at December 31, 2018, Net financial obligations included finance lease liabilities of $353 million. As at December 31, 2019, Net financial obligations also include Lease liabilities recognized under IFRS 16. (ii) Ratio is above 3x on an IFRS basis. However, covenants are calculated on proportionate net financial obligations/EBITDA, including Guatemala and Honduras, which show results below 3x. Gearing ratio

Note 2019 2018 (US$ millions) Net financial obligations (i) ...... C.6. 5,870 4,051 Equity ...... C.1. 2,410 2,542 Net financial obligations and equity...... 8,280 6,593 Gearing ratio...... 0.71 0.61

(i) Same comment as (i) in the table above.

E. Long-term assets

E.1. Intangible assets

Millicom’s intangible assets mainly consist of goodwill arising from acquisitions, customer lists acquired through acquisitions, licenses and rights to operate and use spectrum.

E.1.1. Accounting for intangible assets

Intangible assets acquired in business acquisitions are initially measured at fair value at the date of acquisition, and those which are acquired separately are measured at cost. Internally generated intangible assets, excluding capitalized development costs, are not capitalized but expensed to the statement of income in the expense category consistent with the function of the intangible assets. Subsequently intangible assets are carried at cost, less any accumulated amortization and any accumulated impairment losses. Intangible assets with finite useful lives are amortized over their estimated useful economic lives using the straight-line method and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for intangible assets with finite useful lives are reviewed at least at each financial year end. Changes in expected useful lives or the expected beneficial use of the assets are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. Amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible assets. Goodwill Goodwill represents the excess of cost of an acquisition over the Group’s share in the fair value of identifiable assets less liabilities and contingent liabilities of the acquired subsidiary, at the date of the acquisition. If the fair value or the cost of the acquisition can only be determined provisionally, then goodwill is initially accounted for using provisional values. Within 12 months of the acquisition date, any adjustments to the provisional values are recognized. This is done when the fair values and the cost of the acquisition have been finally determined. Adjustments to provisional fair values are made as if the adjusted fair values had been recognized from the acquisition date. Goodwill on acquisition of subsidiaries is included in intangible assets, net. Goodwill on acquisition of joint ventures or associates is included in investments in joint ventures and associates. Following initial recognition,

193 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

goodwill is measured at cost, less any accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in this manner is measured, based on the relative values of the operation disposed and the portion of the cash-generating unit retained. Licenses Licenses are recorded at either historical cost or, if acquired in a business combination, at fair value at the date of acquisition. Cost includes cost of acquisition and other costs directly related to acquisition and retention of licenses over the license period. These costs may include estimates related to fulfillment of terms and conditions related to the licenses such as service or coverage obligations, and may include up-front and deferred payments. Licenses have a finite useful life and are carried at cost less accumulated amortization and any accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of the licenses over their estimated useful lives. The terms of licenses, which have been awarded for various periods, are subject to periodic review for, among other things, rate setting, frequency allocation and technical standards. Licenses are initially measured at cost and are amortized from the date the network is available for use on a straight-line basis over the license period. Licenses held, subject to certain conditions, are usually renewable and generally non-exclusive. When estimating useful lives of licenses, renewal periods are included only if there is evidence to support renewal by the Group without significant cost. Trademarks and customer lists Trademarks and customer lists are recognized as intangible assets only when acquired or gained in a business combination. Their cost represents fair value at the date of acquisition. Trademarks and customer lists have indefinite or finite useful lives. Indefinite useful life trademarks are tested for impairment annually. Finite useful life trademarks are carried at cost, less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of the trademarks and customer lists over their estimated useful lives. The estimated useful lives for trademarks and customer lists are based on specific characteristics of the market in which they exist. Trademarks and customer lists are included in Intangible assets, net. Estimated useful lives are:

Years Estimated useful lives Trademarks ...... 1 to 15 Customer lists ...... 4 to 20

Programming and content rights Programming and content master rights which are purchased or acquired in business combinations which meet certain criteria are recorded at cost as intangible assets. The rights must be exclusive, related to specific assets which are sufficiently developed, and probable to bring future economic benefits and have validity for more than one year. Cost includes consideration paid or payable and other costs directly related to the acquisition of the rights, and are recognized at the earlier of payment or commencement of the broadcasting period to which the rights relate. Programming and content rights capitalized as intangible assets have a finite useful life and are carried at cost, less accumulated amortization and any accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of the rights over their estimated useful lives. Non-exclusive and programming and content rights for periods less than one year are expensed over the period of the rights. Indefeasible rights of use There is no universally-accepted definition of an indefeasible rights of use (IRU). These agreements come in many forms. However, the key characteristics of a typical arrangement include: • The right to use specified network infrastructure or capacity; • For a specified term (often the majority of the useful life of the relevant assets); • Legal title is not transferred;

194 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

• A number of associated service agreements including operations and maintenance (O&M) and co-location agreements. These are typically for the same term as the IRU; and • Any payments are usually made in advance. IRUs are accounted for either as a lease, or service contract based on the substance of the underlying agreement. IRU arrangements will qualify as a lease if, and when: • The purchaser has an exclusive right for a specified period and has the ability to resell (or sublet) the capacity; and • The capacity is physically limited and defined; and • The purchaser bears all costs related to the capacity (directly or not) including costs of operation, administration and maintenance; and • The purchaser bears the risk of obsolescence during the contract term. If all of these criteria are not met, the IRU is treated as a service contract. An IRU of network infrastructure (cables or fiber) is accounted for as a right of use asset (see E.3.), while capacity IRU (wavelength) is accounted for as an intangible asset. The costs of an IRU recognized as service contract is recognized as prepayment and amortized in the statement of income as incurred over the duration of the contract.

E.1.2. Impairment of non-financial assets

At each reporting date Millicom assesses whether there is an indication that a non-financial asset may be impaired. If any such indication exists, or when annual impairment testing for a non-financial asset is required, an estimate of the asset’s recoverable amount is made. The recoverable amount is determined based on the higher of its fair value less cost to sell, and its value in use, for individual assets, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Where no comparable market information is available, the fair value, less cost to sell, is determined based on the estimated future cash flows discounted to their present value using a discount rate that reflects current market conditions for the time value of money and risks specific to the asset. The foregoing analysis also evaluates the appropriateness of the expected useful lives of the assets. Impairment losses related to assets of continuing operations are recognized in the consolidated statement of income in expense categories consistent with the function of the impaired asset. At each reporting date an assessment is made as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. Other than for goodwill, a previously recognized impairment loss is reversed if there has been a change in the estimate used to determine the asset’s recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

E.1.3. Movements in intangible assets

On May 20, 2019 the Group renewed 10MHz of the 1900 MHz spectrum in Colombia for a period of 10 years for an amount of $47 million (payable in five installments from June 2019 to February 2023) and an obligation to build 45 sites during the 20-month period following the renewal (approximately $20 million cost, that will be capitalized once the sites are built). In December 2019, the company substituted its coverage obligation by agreeing to pay the corresponding amount of $20 million in cash in 6 installments between January to June 2020. As a result, Management recognized an addition to spectrum assets and a liability for $20 million. On July 9, 2019, the Tanzania Communications Regulatory Authority ('TCRA') issued a notice to cancel the license of Telesis, a subsidiary of Millicom in Tanzania that shared its 4G spectrum with Tigo and Zantel operations in the country. The net carrying value of the Telesis' license amounting to $8 million has therefore been impaired during Q3 2019. As a consequence and in order to continue providing 4G services in the country, our operation in Tanzania had to purchase spectrum in the 800MHz band from the TCRA for a period of 15 years and for an amount of $12 million.

195 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

In December 2019, Millicom's wholly-owned subsidiary Telemovil El Salvador S.A. de C.V. ('Telemovil') acquired spectrum in 50Mhz AWS band and paid an advance of $14 million. On January 8, 2020, Telemovil made a final payment of $20 million and started operating the spectrum. In December 2019, Tigo Colombia participated in an auction launched by the Ministerio de Tecnologias de la Informacion y las Comunicaciones (MINTIC), and acquired licenses granting the right to use a total of 40 MHz in the 700 MHz band. The 20-year license will expire in 2040. As a result of this auction,Tigo Colombia has strengthened its spectrum position, which also includes 55 MHz in the 1900 band and 30 MHz of AWS. Tigo Colombia agreed to a total notional consideration of COP$2.45 billion (equivalent to approximately US$736 million), of which approximately 45% is to be met by coverage obligations implemented by 2025. The remaining 55% is payable in cash with an initial payment of approximately US$39 million to be made in Q1 2020, with the remainder payable in 12 annual installments beginning in 2026 and ending in 2037. The final permission to operate in 700 MHz will be given in February 2020.

Movements in intangible assets in 2019

Customer Trademar Goodwill Licenses Lists IRUs k Other (i) Total (US$ millions) Opening balance, net...... 1,069 318 371 89 282 218 2,346 Change in scope ...... 650 139 141 10 — 20 959 Additions...... — 101 — — — 101 202 Amortization charge ...... — (55) (37) (14) (99) (67) (272) Impairment...... — (8) — — — — (8) Disposals, net...... ——————— Transfers...... — (5) — 23 — 15 33 Transfer to/from held for sale (see note E.3)...... — (18) — — — (3) (21) Exchange rate movements...... (7) (8) (1) — — (4) (21) Closing balance, net ...... 1,711 465 473 107 183 279 3,219 Cost or valuation...... 1,711 922 691 214 325 806 4,670 Accumulated amortization and impairment ...... — (458) (218) (107) (142) (527) (1,451) Net...... 1,711 465 473 107 183 279 3,219

Movements in intangible assets in 2018

Customer Trademar Goodwill Licenses Lists IRUs k Other (i) Total (US$ millions) Opening balance, net ...... 599 324 33 105 10 194 1,265 Change in scope...... 504 — 350 — 280 23 1,157 Additions...... — 66 — 2 — 91 158 Amortization charge...... — (48) (11) (14) (8) (65) (145) Impairment ...... (6) — — — — — (6) Disposals, net ...... ——————— Transfers ...... — — — 1 — (16) (15) Transfer to/from held for sale (iii)...... — (12) — — — — (12) Exchange rate movements...... (28) (12) (1) (5) — (9) (55) Closing balance, net...... 1,069 318 371 89 282 218 2,346 Cost or valuation...... 1,069 646 561 176 325 646 3,423 Accumulated amortization and impairment...... — (328) (190) (87) (43) (428) (1,077) Net ...... 1,069 318 371 89 282 218 2,346

(i) Other includes mainly software costs

196 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

E.1.4. Cash used for the purchase of intangible assets

Cash used for intangible asset additions

2019 2018 2017 (US$ millions) Additions...... 202 158 130 Change in accruals and payables for intangibles...... (32) (10) 3 Cash used for additions ...... 171 148 133

E.1.5. Goodwill

Allocation of Goodwill to cash generating units (CGUs), net of exchange rate movements and after impairment

2019 2018 (US$ millions) Panama (see note A.1.2.)(i)...... 930 504 El Salvador ...... 194 194 Costa Rica...... 123 116 Paraguay...... 50 54 Colombia...... 181 183 Tanzania (see note E.1.6.)...... 12 12 Nicaragua (see note A.1.2) ...... 217 4 Other...... 3 3 Total...... 1,711 1,069

(i) Restated as a result of the finalization of the Cable Onda purchase accounting. (note A.1.2.). E.1.6. Impairment testing of goodwill

Goodwill from CGUs is tested for impairment at least each year and more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses on goodwill are not reversed. Goodwill arising on business combinations is allocated to each of the Group’s CGUs or groups of CGUs that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocated: • Represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and • Is not larger than an operating segment. Impairment is determined by assessing the value-in-use and, if appropriate, the fair value less costs to sell of the CGU (or group of CGUs), to which goodwill relates. Impairment testing at December 31, 2019 Goodwill was tested for impairment by assessing the recoverable amount against the carrying amount of the CGU based on discounted cash flows. The recoverable amounts are based on value-in-use. The value-in-use is determined based on the method of discounted cash flows. The cash flow projections used (operating profit margins, income tax, working capital, capex and license renewal cost) are extracted from business plans approved by management and presented to the Board, usually covering a period of five years. This planning horizon reflects industry practice in the countries where the Group operates and stage of development or redevelopment of the business in those countries. Cash flows beyond this period are extrapolated using a perpetual growth rate. When value-in-use results are lower than the carrying values of the CGUs, management determines the recoverable amount by using the fair value less cost of disposal (FVLCD) of the CGUs. FVLCD is usually determined by using recent offers received from third parties (Level 1). For the year ended December 31, 2019, management concluded no impairment should be recorded in the Group consolidated financial statements. Impairment testing at December 31, 2018

197 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

For the year ended December 31, 2018, management concluded that our previously independent Zantel CGU, part of the Africa segment, should be impaired. Hence, in accordance with IAS 36, an impairment loss of $6 million has been allocated to the amount of goodwill allocated to the CGU to reduce the carrying amount of this operation to its value in use. The impairment has been classified within the caption "Other operating income (expenses), net", in the Group’s statement of income. Key assumptions used in value in use calculations

The process of preparing the cash flow projections considers the current market condition of each CGU, analyzing the macroeconomic, competitive, regulatory and technological environments, as well as the growth opportunities of the CGUs. Therefore, a growth target is defined for each CGU, based on the appropriate allocation of operating resources and the capital investments required to achieve the target. The foregoing forecasts could differ from the results obtained through time; however, the Company prepares its estimates based on the current situation of each of the CGUs. Relevance of budgets used for the impairment test is also reviewed annually, management performing regressive analysis between actual figures and budget/5YP used for previous year impairment test. The cash flow projections for all CGUs is most sensitive to the following key assumptions: • EBITDA margin is determined by dividing EBITDA by total revenues. • CAPEX intensity is determined by dividing CAPEX by total revenues. • Gross Domestic Product (“GDP”) less inflation rates are used as perpetual growth rate. • Weighted average cost of capital (“WACC”) is used to discount the projected cash flows. The most significant estimates used for the 2019 and 2018 impairment test are shown below:

Average EBITDA Average CAPEX Perpetual growth WACC rate after tax CGU margin (%) (i) intensity (%) (i) rate (%) (%) 2019 2018 2019 2018 2019 2018 2019 2018 Bolivia...... 42.0 43.1 18.4 17.0 1.5 3.0 10.7 10.2 Chad (see note A.1.3)...... n/a 26.7 n/a 15.9 n/a 2.6 n/a 14.8 Colombia ...... 34.1 32.1 17.7 19.3 1.9 2.9 8.6 8.9 Costa Rica ...... 36.3 41.2 23.3 19.9 1.9 3.1 10.1 10.2 El Salvador...... 33.4 42.2 15.2 15.7 0.8 1.6 10.7 11.7 Nicaragua (see note A.1.2)...... 33.7 41.0 16.2 49.6 2.0 3.6 10.9 10.1 Panamá (see note A.1.2)...... 42.6 n/a 14.8 n/a 1.5 n/a 8.3 n/a Paraguay ...... 46.9 50.4 16.0 17.3 1.6 3.0 9.0 9.8 Tanzania ...... 31.2 37.1 12.2 18.5 1.5 4.6 14.4 14.4

(i) Average is computed over the period covered by the plan (5 years)

Sensitivity analysis to changes in assumptions

Management performed a sensitivity analysis on key assumptions within the test. The following maximum increases or decreases, expressed in percentage points, were considered for all CGUs:

Reasonable changes in key assumptions (%) Financial variables WACC rates ...... +/-1 Perpetual growth rates ...... +/-1 Operating variables EBITDA margin ...... +/-2 CAPEX intensity ...... +/-1

The sensitivity analysis shows a comfortable headroom between the recoverable amounts and the carrying values for all CGUs at December 31, 2019, except of our Nicaragua CGU.

198 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

In respect of Nicaragua CGU, taken individually, the below changes in key assumptions would trigger a potential impairment, which would mainly be due to the under-performance of our legacy fixed business in the country as well as the current political and economic turmoil:

Potential Sensitivity analysis impairment In % US$ millions Financial variables WACC rate +1 32 Perpetual growth rate -1 18 Operating variables EBITDA margin -2 1 Combining changes in variables WACC rate and Perpetual growth rate...... +1 and -1 63

E.2. Property, plant and equipment

E.2.1. Accounting for property, plant and equipment

Items of property, plant and equipment are stated at either historical cost, or the lower of fair value and present value of the future minimum lease payments for assets under finance leases, less accumulated depreciation and accumulated impairment. Historical cost includes expenditure that is directly attributable to acquisition of items. The carrying amount of replaced parts is derecognized. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset and the remaining life of the license associated with the assets, unless the renewal of the license is contractually possible.

Estimated useful lives Duration Buildings ...... 40 years or lease period, if shorter Networks (including civil works) ...... 5 to 15 years or lease period, if shorter Other ...... 2 to 7 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The assets’ residual value and useful life is reviewed, and adjusted if appropriate, at each statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount. Construction in progress consists of the cost of assets, labor and other direct costs associated with property, plant and equipment being constructed by the Group, or purchased assets which have yet to be deployed. When the assets become operational, the related costs are transferred from construction in progress to the appropriate asset category and depreciation commences. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Ongoing routine repairs and maintenance are charged to the statement of income in the financial period in which they are incurred. Costs of major inspections and overhauls are added to the carrying value of property, plant and equipment and the carrying amount of previous major inspections and overhauls is derecognized. Equipment installed on customer premises which is not sold to customers is capitalized and amortized over the customer contract period. A liability for the present value of the cost to remove an asset on both owned and leased sites (for example cell towers) and for assets installed on customer premises (for example set-top boxes), is recognized when a present obligation for the removal exists. The corresponding cost of the obligation is included in the cost of the asset and depreciated over the useful life of the asset, or lease period if shorter.

199 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset when it is probable that such costs will contribute to future economic benefits for the Group and the costs can be measured reliably.

E.2.2. Movements in tangible assets

Movements in tangible assets in 2019

Network Land and Construction Equipment (ii) Buildings in Progress Other(i) Total (US$ millions) Opening balance, net...... 2,455 175 284 156 3,071 Change in scope ...... 190 44 14 7 255 Change in accounting policy ...... (307) — — (1) (307) Additions ...... 87 4 612 16 719 Impairments/reversal of impairment, net ...... — — — 1 1 Disposals, net...... (8) (1) (6) (3) (19) Depreciation charge...... (588) (13) — (110) (711) Asset retirement obligations...... 14 5 — — 19 Transfers...... 444 4 (537) 64 (24)

Transfer from/(to) assets held for sale (see note E.4)...... (61) (14) (7) (5) (88) Exchange rate movements ...... (25) (2) (5) (1) (34) Closing balance, net ...... 2,201 202 355 125 2,883 Cost or valuation...... 6,644 360 355 476 7,834 Accumulated amortization and impairment...... (4,443) (158) — (351) (4,952) Net at December 31, 2019 ...... 2,201 202 355 125 2,883 Movements in tangible assets in 2018

Network Land and Construction equipment(ii) buildings in progress Other(i) Total (US$ millions) Opening balance, net...... 2,399 147 206 128 2,880 Change in Scope (iii)...... 253 41 32 60 386 Additions ...... 62 1 626 7 696 Impairments/reversal of impairment, net ...... 1 — — — 1 Disposals, net...... (24) (2) (2) — (29) Depreciation charge...... (631) (11) — (43) (685) Asset retirement obligations...... 14 1 — — 15 Transfers...... 551 9 (568) 14 6 Transfers from/(to) assets held for sale (see note E.4.)(iv) ...... (45) (3) (2) (2) (52) Exchange rate movements ...... (124) (8) (8) (7) (147) Closing balance, net ...... 2,455 175 284 156 3,071 Cost or valuation...... 6,663 270 284 573 7,790 Accumulated amortization and impairment...... (4,207) (95) — (417) (4,719) Net at December 31, 2018 ...... 2,455 175 284 156 3,071

(i) Other mainly includes office equipment and motor vehicles. (ii) As a result of the application of IFRS 16 finance leases were reclassified to lease liabilities on January 1, 2019. See above in the "New and amended IFRS accounting standards" and notes C.4. and E.4. for further information. The net carrying amount of network equipment under finance leases at December 31, 2018 were $307 million.

200 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

(iii) Restated after finalization of the Cable Onda purchase accounting. See note A.1.2.

Borrowing costs capitalized for the years ended December 31, 2019, 2018 and 2017 were not significant.

E.2.3. Cash used for the purchase of tangible assets

Cash used for property, plant and equipment additions

2019 2018 2017 (US$ millions) Additions...... 719 698 824 Change in advances to suppliers ...... 1 2 (8) Change in accruals and payables for property, plant and equipment...... 17 (25) 26 Finance leases(i)...... (1) (43) (192) Cash used for additions...... 736 632 650

(i) As a result of the application of IFRS 16 finance leases were reclassified to lease liabilities on January 1, 2019. See above in the "New and amended IFRS accounting standards" and notes C.4. and E.4. for further information.

E.3. Right of use assets (as from January 1, 2019 after the application of IFRS 16)

Right-of-use assets are measured at cost comprising the following: • the amount of the initial measurement of lease liability • any lease payments made at or before the commencement date less any lease incentives received • any initial direct costs, and • restoration costs Refer to note C.4. for further details on lease accounting policies. Movements in right of use assets in 2019

Other Land and network Right-of-use assets buildings Sites rental Tower rental equipment Capacity Other Total (US$ millions) Opening balance, net 154 67 623 9 — 4 856 Change in scope...... — 43 121 1 12 — 177 Additions ...... 25 4 67 1 2 1 102 Modifications ...... 6 (2) 7 — — — 11 Impairments ...... (1) — — — — — (1) Disposals...... (4) (4) (1) — — — (10) Depreciation...... (35) (16) (86) (2) — (2) (141) Transfers...... — — 1 — — — 1 Transfers to/from assets held for sale...... (1) (5) (3) — — — (9) Exchange rate movements...... — (2) (7) — — — (10) Closing balance, net 145 87 720 8 14 3 977 Cost of valuation...... 177 103 900 11 16 8 1,216 Accumulated depreciation and impairment...... (32) (16) (180) (3) (2) (5) (238) Net at December 31, 2019 145 87 720 8 14 3 977

201 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

E.4. Assets held for sale

If Millicom decides to sell subsidiaries, investments in joint ventures or associates, or specific non-current assets in its businesses, these items qualify as assets held for sale if certain conditions are met.

E.4.1. Classification of assets held for sale

Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is expected to be recovered principally through sale, not through continuing use. Liabilities of disposal groups are classified as Liabilities directly associated with assets held for sale.

E.4.2. Millicom’s assets held for sale

The following table summarizes the nature of the assets and liabilities reported under assets held for sale and liabilities directly associated with assets held for sale as at December 31, 2019 and 2018:

As at December 31, 2019 2018 (US$ millions) Assets and liabilities reclassified as held for sale ($ millions) Towers Paraguay (see note E.4.1.) ...... — 2 Towers Colombia (see note E.4.1.)...... 2 — Towers El Salvador (see note E.4.1.)...... 1 1 Towers Zantel ...... 1 — Other...... — — Total assets of held for sale...... 5 3 Towers Paraguay...... — — Total liabilities directly associated with assets held for sale...... — — Net assets held for sale / book value...... 5 3

Chad As mentioned in note A.1.3., on June 26, 2019, the Group completed the disposal of its operations in Chad for a cash consideration of $110 million. On the same date, Chad was deconsolidated and a gain on disposal of $77 million, net of costs of disposal of $4 million, was recognized. Foreign currency exchange losses accumulated in equity of $8 million have also been recycled in the statement of income accordingly. The resulting net gain of $70 million has been recognized under ‘Profit (loss) for the period from discontinued operations, net of tax’. The operating net loss of the operation for the period from January 1, 2019 to June 26, 2019 was $5 million. The assets and liabilities deconsolidated on the date of the disposal were as follows:

Assets and liabilities held for sale ($ millions) June 26, 2019 Intangible assets, net 18 Property, plant and equipment, net 89 Right of use assets 9 Other non-current assets 8 Current assets 34 Cash and cash equivalents 9 Total assets of disposal group held for sale 168 Non-current financial liabilities 8 Current liabilities 131 Total liabilities of disposal group held for sale 140 Net assets held for sale at book value 28

202 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Senegal As mentioned in note A.1.3. Millicom announced that it had agreed to sell its Senegal business to a consortium consisting of NJJ, Sofima (managed by the Axian Group) and Teylium Group. The sale was completed on April 27, 2018 in exchange of a final cash consideration of $151 million. The operations in Senegal were deconsolidated from that date resulting in a net gain on disposal of $6 million, including the recycling of foreign currency exchange losses accumulated in equity since the creation of the local operations. This gain has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’. The assets and liabilities were transferred to assets held for sale in relation to our operations in Senegal as at February 7, 2017 and therefore classified as held for sale as at December 31, 2017. The table below shows the assets and liabilities deconsolidated at the date of the disposal:

April 27, 2018 (US$ Assets and liabilities held for sale millions) Intangible assets, net ...... 40 Property, plant and equipment, net...... 126 Other non-current assets...... 2 Current assets ...... 56 Cash and cash equivalents...... 3 Total assets of disposal group held for sale...... 227 Non-current financial liabilities...... 8 Current liabilities...... 73 Total liabilities of disposal group held for sale...... 81 Net assets / book value ...... 146

Rwanda As mentioned in note A.1.3. on December 19, 2017, Millicom announced that it has signed an agreement for the sale of its Rwanda operations to subsidiaries of Bharti Airtel Limited.for a final cash consideration of $51 million, including a deferred cash payment due in January 2020 for an amount of $18 million. The transaction also included earn-outs for $7 million that were not recognized by the Group. The sale was completed on January 31, 2018. On that day, Millicom's operations in Rwanda have been deconsolidated and no material loss on disposal was recognized (its carrying value was aligned to its fair value less costs of disposal as of December 31, 2017). However, a loss of $32 million was recognized in 2018 corresponding to the recycling of foreign currency exchange losses accumulated in equity since the creation of the local operation. This loss has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’. The table below shows the assets and liabilities deconsolidated at the date of the disposal:

January 31, 2018 (US$ Assets and liabilities reclassified as held for sale millions) Intangible assets, net ...... 12 Property, plant and equipment, net...... 53 Other non-current assets...... 4 Current assets ...... 14 Cash and cash equivalents...... 2 Total assets of disposal group held for sale...... 85 Non-current financial liabilities...... 11 Current liabilities...... 28 Total liabilities of disposal group held for sale...... 40 Net assets / book value ...... 46

203 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

In accordance with IFRS 5, the Group’s businesses in Chad(Q2 2018), Rwanda (Q1 2018), Ghana (Q3 2017) and Senegal (Q1 2017) had been classified as assets held for sale and their results were classified as discontinued operations. Comparative figures of the statement of income have therefore been represented accordingly. Financial information relating to the discontinued operations for the year ended December 31, 2019, 2018 and 2017 is set out below. Figures shown below are after intercompany eliminations.

Results from discontinued operations

Year ended December 31, 2019 2018 2017 (US$ millions) Revenue...... 50 189 440 Cost of sales ...... (14) (51) (130) Operating expenses...... (29) (83) (188) Other expenses linked to the disposal of discontinued operations...... (10) (10) (7) Depreciation and amortization ...... (11) (27) (67) Other operating income (expenses), net ...... — (9) (4) Gain/(loss) on disposal of discontinued operations...... 74 (29) 38 Operating profit (loss)...... 61 (21) 81 Interest income (expense), net ...... (2) (6) (28) Other non-operating (expenses) income, net...... — (2) 4 Profit (loss) before taxes ...... 59 (29) 56 Credit (charge) for taxes, net...... (2) (4) 4 Net Profit/(loss) from discontinuing operations...... 57 (33) 60

Cash flows from discontinued operations

Year ended December 31, 2019 2018 2017 (US$ millions) Cash from (used in) operating activities, net (8) (38) (1) Cash from (used in) investing activities, net 5 8 (25) Cash from (used in) financing activities, net 7 11 8

F. Other assets and liabilities

F.1. Trade receivables

Millicom’s trade receivables mainly comprise interconnect receivables from other operators, postpaid mobile and residential cable subscribers, as well as B2B customers. The nominal value of receivables adjusted for impairment approximates the fair value of trade receivables.

2019 2018 (US$ millions) Gross trade receivables...... 636 592 Less: provisions for expected credit losses ...... (265) (249) Trade receivables, net...... 371 343

204 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Aging of trade receivables

Past due (net of Neither past impairments) due nor impaired 30–90 days >90 days Total (US$ millions) 2019: Telecom operators 23 9 8 40 Own customers 177 63 29 270 Others 40 15 5 60 Total 241 88 43 371 2018: Telecom operators 17 9 14 39 Own customers 158 69 19 246 Others 36 17 5 58 Total 210 95 37 343

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for expected credit losses. The Group recognizes an allowance for expected credit losses (ECLs) applying a simplified approach in calculating the ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime of ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The provision for expected credit losses is recognized in the consolidated statement of income within Cost of sales. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those maturing more than 12 months after the end of the reporting period. These are classified within non-current assets. Loans and receivables are carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of income when the loans and receivables are derecognized or impaired, as well as through the amortization process.

F.2. Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Inventories

2019 2018 (US$ millions) Telephone and equipment...... 18 26 SIM cards ...... 3 4 IRUs...... 3 3 Other...... 9 6 Inventory at December 31,...... 32 39

F.3. Trade payables

Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method where the effect of the passage of time is material. From time to time, the Group enters into agreements to extend payment terms with various suppliers, and with factoring companies when such payments are discounted. The corresponding amount pending payment as of December 31, 2019, is recognized in Trade payables for an amount of $40 million (2018: $26 million).

205 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

F.4. Current and non-current provisions and other liabilities

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, risks specific to the liability. Where discounting is used, increases in the provision due to the passage of time are recognized as interest expenses.

F.4.1. Current provisions and other liabilities

Current

2019 2018 (US$ millions) Deferred revenue ...... 77 85 Customer deposits...... 14 15 Current legal provisions...... 36 27 Tax payables...... 74 68 Customer and MFS distributor cash balances ...... 141 147 Withholding tax on payments to third parties...... 15 17 Other provisions...... 3 7 Other current liabilities(i) ...... 113 126 Total...... 474 492

(i) Includes 36 million (2018: 36 million) of tax risk liabilities not related to income tax. F.4.2. Non-current provisions and other liabilities

Non-current

2019 2018 (US$ millions) Non-current legal provisions ...... 18 8 Long-term portion of asset retirement obligations...... 96 77 Long-term portion of deferred income on tower sale and leasebacks recognized under IAS 17...... 68 85 Long-term employment obligations ...... 71 68 Accruals and payables in respect of spectrum and license acquisitions ...... 61 41 Other non-current liabilities...... 68 71 Total...... 383 351

206 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

F.5. Assets and liabilities related to contract with customers

Contract assets, net

2019 2018 (US$ millions) Long-term portion 6 3 Short-term portion 37 35 Less: provisions for expected credit losses (2) (1) Total 41 37

Contract liabilities

2019 2018 (US$ millions) Long-term portion 1 1 Short-term portion 81 86 Total 82 87

The Group recognized revenue for $87 million in 2019 (2018: $45 million) that was included in the contract liability balance at the beginning of the year. The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at December 31, 2019 is $61 million ($60 million is expected to be recognized as revenue in the 2020 financial year and the remaining $1 million in the 2021 financial year or later) (i). (i) This amount does not consider contracts that have an original expected duration of one year or less, neither contracts in which consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e. billing corresponds to accounting revenue). Contract costs, net (i)

2019 2018 (US$ millions) Net at January 1 4 4 Contract costs capitalized 7 4 Amortisation of contract costs (6) (4) Net at December 31 5 4

(i) Incremental costs of obtaining a contract are expensed when incurred if the amortization period of the asset that Millicom otherwise would have recognized is one year or less. G. Additional disclosure items

G.1. Fees to auditors

2019 2018 2017 (US$ millions) Audit fees...... 6.8 6.7 4.7 Audit related fees...... 1.3 0.4 0.3 Tax fees ...... 0.1 0.2 0.2 Other fees ...... 0.6 0.6 0.7 Total ...... 8.8 7.7 5.9

207 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

G.2. Capital and operational commitments

Millicom has a number of capital and operational commitments to suppliers and service providers in the normal course of its business. These commitments are mainly contracts for acquiring network and other equipment, and leases for towers and other operational equipment.

G.2.1. Capital commitments

At December 31, 2019, the Company and its subsidiaries had fixed commitments to purchase network equipment, land and buildings, other fixed assets and intangible assets of $122 million of which $102 million are due within one year (December 31, 2018: $88 million of which $71 million were due within one year). The Group’s share of commitments from the joint ventures is, respectively $52 million and $51 million. (December 31, 2018: $66 million of which $56 million were due within one year).

G.2.2. Lease commitments - until December 31, 2018

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and involves an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and whether or not the arrangement conveys a right to use the asset. The sale and leaseback of towers and related site operating leases and service contracts are accounted for in accordance with the underlying characteristics of the assets, and the terms and conditions of the lease agreements. On transfer to the tower companies, the portion of the towers leased back are accounted for as operating leases or finance leases according to the criteria set out above. The portion of towers being leased back represents the dedicated part of each tower on which Millicom’s equipment is located and was derived from the average technical capacity of the towers. Rights to use the land on which the towers are located are accounted for as operating leases, and costs of services for the towers are recorded as operating expenses. From January 1, 2019, the Group has recognized right of use assets for these leases, except for short term or low value leases. See above in the "New and amended IFRS accounting standards", note C.4.and E.3. for further information. Operating leases Operating leases are all other leases that are not finance leases. Operating lease payments are recognized as expenses in the consolidated statement of income on a straight-line basis over the lease term. Operating leases mainly comprise land in which cell towers are located (including those related to towers sold and leased back) and buildings. Total operating lease expense from continuing operations for the year ended 2018 was $152 million–see note B.2.

Annual operating lease commitments from continuing operations

2018 (i) (US$ millions) Within one year 127 Between one and five years 412 After five years 262 Total 801

(i) The Group’s share in joint ventures operating lease commitments in 2018 amount to $312 million and are excluded from the table above. Finance leases Finance leases, which transfer substantially all risks and benefits incidental to ownership of the leased item to the lessee, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Where a finance lease results from a sale and leaseback transaction, any excess of sales proceeds over the carrying amount of the assets is deferred and amortized over the lease term. Capitalized leased assets are depreciated over the shorter of the estimated useful lives of the assets, or the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. Finance leases mainly comprise lease of tower space in El Salvador, Paraguay, Tanzania and Colombia (see note C.3.4.), lease of poles in Colombia and tower sharing in other countries. Other financial leases mainly consist of lease agreements relating to vehicles and IT equipment.

208 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Annual minimum finance lease commitments from continuing operations

2018 (i) (US$ millions)

Within one year 99 Between one and five years 400 After five years 415 Total 914

(i) The Group’s share in joint ventures finance lease commitments in 2018 amounted to $1 million and are excluded from the table above. The corresponding finance lease liabilities at December 31, 2018, were $353 million. Interest expense on finance lease liabilities amounted to $91 million for the year 2018.

G.3. Contingent liabilities

G.3.1. Litigation and legal risks

The Company and its operations are contingently liable with respect to lawsuits, legal, regulatory, commercial and other legal risks that arise in the normal course of business. As of December 31, 2019, the total exposure for claims and litigation risks against Millicom and its subsidiaries is $204 million (December 31, 2018: $683 million). The decrease is mainly due to Colombia where some significant cases were closed or became time barred during the year. The Group's share of the comparable exposure for joint ventures is $4 million (December 31, 2018: $5 million). As at December 31, 2019, $30 million has been provided by its subsidiaries for these risks in the consolidated statement of financial position (December 31, 2018: $22 million). The Group’s share of provisions made by the joint ventures was $3 million (December 31, 2018: $4 million). While it is not possible to ascertain the ultimate legal and financial liability with respect to these claims and risks, the ultimate outcome is not anticipated to have a material effect on the Group’s financial position and operations. Ongoing investigation by the International Commission Against Impunity in Guatemala (CICIG) Between 2017 and 2019, the CICIG and Guatemalan prosecutors have pursued investigations that have included the country’s telecommunications sector and Comcel, our Guatemalan joint venture. On September 3, 2019, the CICIG’s activities in Guatemala were discontinued, after the Guatemalan government did not renew the CICIG’s mandate, and it is unclear whether the investigations will continue. As at December 31, 2019, Management is not able to assess the potential impact on these consolidated financial statements of any remedial actions that may need to be taken as a result of the investigations, or penalties that may be imposed by law enforcement authorities. Accordingly, no provision has been recorded as of December 31, 2019. Other At December 31, 2019, Millicom has various other less significant claims which are not disclosed separately in these consolidated financial statements because they are either not material or the related risk is remote.

209 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

G.3.2. Tax related risks and uncertain tax position

The Group operates in developing countries where the tax systems, regulations and enforcement processes have varying stages of development creating uncertainty regarding the application of the tax law and interpretation of tax treatments. The Group is also subject to regular tax audits in the countries where it operates. When there is uncertainty over whether the taxation authority will accept a specific tax treatment under the local tax law, that tax treatment is therefore uncertain. The resolution of tax positions taken by the Group, through negotiations with relevant tax authorities or through litigation, can take several years to complete and, in some cases, it is difficult to predict the ultimate outcome. Therefore, judgment is required to determine provisions for taxes. In assessing whether and how an uncertain tax treatment affects the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, the Group assumes that a taxation authority with the right to examine amounts reported to it will examine those amounts and have full knowledge of all relevant information when making those examinations. The Group has a process in place, and applies significant judgment, in identifying uncertainties over income tax treatments. Management considers whether or not it is probable that a taxation authority will accept an uncertain tax treatment. On that basis, the identified risks are split into three categories (i) remote risks (risk of outflow of tax payments are up to 20%), (ii) possible risks (risk of outflow of tax payments assessed from 21% to 49%) and probable risks (risk of outflow is more than 50%). The process is repeated every quarter by the Group. If the Group concludes that it is probable or certain that the taxation authority will accept the tax treatment, the risks are categorized either as possible or remote, and it determines the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment used or planned to be used in its income tax filings. The risks considered as possible are not provisioned but disclosed as tax contingencies in the Group consolidated financial statements while remote risks are neither provisioned nor disclosed. If the Group concludes that it is probable that the taxation authority will not accept the Group’s interpretation of the uncertain tax treatment, the risks are categorized as probable, and are presented to reflect the effect of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates by generally using the most likely amount method – the single most likely amount in a range of possible outcomes. If an uncertain tax treatment affects both deferred tax and current tax, the Group makes consistent estimates and judgments for both. For example, an uncertain tax treatment may affect both taxable profits used to determine the current tax and tax bases used to determine deferred tax. If facts and circumstances change, the Group reassesses the judgments and estimates regarding the uncertain tax position taken. At December 31, 2019, the tax risks exposure of the Group's subsidiaries is estimated at $300 million, for which provisions of $50 million have been recorded in tax liabilities; representing the probable amount of eventual claims and required payments related to those risks (2018: $226 million of which provisions of $44 million were recorded). The Groups' share of comparable tax exposure and provisions in its joint ventures amounts to $49 million (2018: $29 million) and $4 million (2018: $2 million), respectively.

G.4. Non-cash investing and financing activities

Non-cash investing and financing activities from continuing operations

Note 2019 2018 2017 (US$ millions) Investing activities Acquisition of property, plant and equipment, including (finance) leases ...... E.2.2. 17 (65) (174) Asset retirement obligations...... E.2.2. 19 15 (20) Acquisition of subsidiaries, joint ventures and associates, net of cash acquired ...... A.1.2. — 30 — Financing activities (Finance) Leases ...... C.3.4. 1 (43) 192 Share based compensation ...... B.4.1. 27 21 22

210 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

G.5. Related party balances and transactions

The Group’s significant related parties are: • Kinnevik AB (Kinnevik) and subsidiaries, Millicom’s previous principal shareholder - until November 14, 2019, date on which Millicom SDRs were paid out to the shareholders of Kinnevik (see 'Introduction' note); • Helios Towers Africa Ltd (HTA), in which Millicom held a direct or indirect equity interest - until October 15, 2019, date on which Millicom lost significant influence on HTA and started accounting for its investments at fair value under IFRS 9 (see note A.3.1.and C.7.3. • EPM and subsidiaries (EPM), the non-controlling shareholder in our Colombian operations (see note A.1.4.); • Miffin Associates Corp and subsidiaries (Miffin), our joint venture partner in Guatemala. • Cable Onda partners and subsidiaries, the non-controlling shareholders in our Panama operations (see note A.1.2.). Kinnevik Until November 14, 2019, Kinnevik was Millicom's principal shareholder, owning approximately 37% of Millicom (December 31, 2018: 37%). Kinnevik is a Swedish holding company with interests in the telecommunications, media, publishing, paper and financial services industries. During 2019, 2018 and 2017, Kinnevik did not purchase any Millicom shares. There were no significant loans made by Millicom to or for the benefit of Kinnevik or Kinnevik controlled entities. During 2019, 2018 and 2017, the Company purchased services from Kinnevik subsidiaries including fraud detection, procurement and professional services. Transactions and balances with Kinnevik Group companies are disclosed under 'Other' in the tables below. Helios Towers Millicom sold its tower assets and leased back a portion of space on the towers in several African countries and contracted for related operation and management services with HTA. The Group has future lease commitments in respect of the tower companies (see note E.4.). As mentioned above, Helios Towers ceased to be a related party to the Group from October 15, 2019. Empresas Públicas de Medellín (EPM) EPM is a state-owned, industrial and commercial enterprise, owned by the municipality of Medellin, and provides electricity, gas, water, sanitation, and telecommunications. EPM owns 50% of our operations in Colombia. Miffin Associates Corp (Miffin) The Group purchases and sells products and services from and to the Miffin Group. Transactions with Miffin represent recurring commercial operations such as purchase of handsets, and sale of airtime. Cable Onda Partners Our partners in Panama are the non-controlling shareholders of Cable Onda and own 20% of the company, and indirectly 20% of Telefonica Moviles Panama, S.A., which has been acquired by Cable Onda in August 2019. Additionally, they also hold interests in several entities which have purchasing and selling recurring commercial operations with Cable Onda (such as the sale of content costs, delivery of broadband services, etc.). Transactions and balances with Cable Onda Partners companies are disclosed under 'Other' in the tables below.

Expenses from transactions with related parties 2019 2018 2017 (US$ millions) Purchases of goods and services from Miffin ...... (209) (173) (181) Purchases of goods and services from EPM...... (42) (40) (36) Lease of towers and related services from HTA(i)...... (146) (28) (28) Other expenses...... (15) (3) (4) Total ...... (412) (244) (250)

(i) HTA ceased to be a related party on October 15, 2019. See note C.7.3. for further details.

211 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Income and gains from transactions with related parties 2019 2018 2017 (US$ millions) Sale of goods and services to Miffin ...... 306 284 277 Sale of goods and services to EPM ...... 13 17 18 Other revenue...... 3 2 1 Total ...... 322 303 295

As at December 31, the Company had the following balances with related parties:

Year ended December 31 2019 2018 (US$ millions) Non-current and current liabilities Payables to Guatemala joint venture(i)...... 361 315 Payables to Honduras joint venture(ii)...... 133 143 Payables to EPM...... 37 14 Other accounts payable...... — 9 Sub-total...... 531 482 (Finance) Lease liabilities to HTA (iii) ...... — 99 Total...... 531 580

(i) Shareholder loans bearing interest. Out of the amount above, $337 million are due over more than one year. (ii) Amount payable mainly consist of dividend advances for which dividends are expected to be declared later in 2020 and/or shareholder loans. (iii) HTA ceased to be a related party on October 15, 2019. See note C.7.3. for further details. .

Year ended December 31 2019 2018 (US$ millions) Non-current and current assets Receivables from EPM ...... 3 5 Receivables from Guatemala and Honduras joint ventures...... 23 20 Advance payments to Helios Towers Tanzania(ii)...... — 6 Receivables from Panama...... — — Receivable from AirtelTigo Ghana (i) ...... 43 41 Other accounts receivable...... 4 1 Total...... 73 73

(i) Disclosed under Other non-current assets in the statement of financial position. See note A.2.2. (ii) Helios Towers ceased to be to be a related party on October 15, 2019.

H. IPO – Millicom’s operations in Tanzania

In June 2016, an amendment to the Electronic and Postal Communications Act (“EPOCA”) in the Finance Act 2016 required all Tanzanian licensed telecom operators to sell 25% of the authorised share capital in a public offering on the Dar Es Salaam Stock Exchange. In December 2019, the Group filed the draft prospectus with the Tanzania Capital Market and Securities Authority with the view to initiate the listing process in H1 2020.

212 Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

I. Subsequent events

Pivot in shareholder remuneration On February 24, 2020, Millicom’s Board approved to the Annual General Meeting of the shareholders a share buyback program to repurchase at least $500 million over the next three years. The current shareholder authorization, which expires on May 5, 2020, allows for the repurchase of up to 5% of the outstanding share capital. In addition, the Board approved to the Annual General Meeting of the shareholders a dividend distribution of $1.00 per share to be paid in 2020. The Annual General Meeting to vote on these matters is scheduled for May 5, 2020. On February 25, 2020, Millicom announced a three year $500 million share repurchase plan and on February 28, 2020 it initiated the first phase of this program comprising the purchase of not more than 350,000 shares and not more than a maximum total amount of SEK 107 million (approximately $11 million). The purpose of the repurchase program is to reduce Millicom's share capital, or to use the repurchased shares for meeting obligations arising under Millicom´s employee share based incentive programs. The repurchase program may take place during the period between February 28, 2020 and May 5, 2020. Payment for the shares will be made in cash. Paraguay bond On January 28, 2020, Millicom’s wholly-owned subsidiary Telefónica Celular del Paraguay S.A.E ("Telecel"), closed a $250 million re-tap to its senior unsecured notes due 2027, representing an additional issuance of Telecel's outstanding $300 million 5.875% senior notes due 2027 issued on April 5, 2019. The new notes will be treated as a single class with the initial notes, and they were priced at 106.375 for an implied yield to maturity of 4.817%.

213 Who We Are Managing Our Business Fulfilling Our Corporate Responsibility Governance Auditors’ Reports Financial Statements

Corporate Information

BOARD OF DIRECTORS AUDITOR José Antonio Ríos García Ernst & Young Chairman, Director Société anonyme 35E Avenue John F. Kennedy Pernille Erenbjerg Luxembourg, L-1855 Deputy Chairman, Director Odilon Almeida STOCK TRANSFER AGENT Director Questions or requests related to stock Janet Davidson transfers, lost certificates, or account Director changes should be directed to: Shareholder Services Tomas Eliasson 1-800-937-5449 ext. 4801 Director 1-718-921-8200 ext. 4801 Lars-Åke Norling [email protected] Director www.astfinancial.com

James Thompson INVESTOR RELATIONS Director [email protected] EXECUTIVE TEAM MEDIA CONTACT Mauricio Ramos Chief Executive Officer [email protected] Tim Pennington ANNUAL MEETING Chief Financial Officer The Annual Meeting of Esteban Iriarte Shareholders will be held on Chief Operating Officer—Latam May 5, 2020 in Luxembourg. Xavier Rocoplan HEADQUARTERS Chief Technology and Information Officer Millicom International Cellular S.A. Rachel Samrén 2 Rue du Fort Bourbon Chief External Affairs Officer Luxembourg, L-1249 Salvador Escalón General Counsel Susy Bobenrieth Chief Human Resources Officer

Millicom 2019 Annual Report For further information, please contact: [email protected] millicom.com